Small Business

Best Small Business Loans of 2016 With Reviews

small business loan block lettersGetting a loan, whether it’s for personal or business use, can be a long and involved process that doesn’t always end the way you hoped it would. But while getting a personal loan can be a daunting process that focuses primarily on your personal credit history and FICO score, a business loan is often a much more complicated endeavor because banks will often take your credit history and that of your business into account before they make a decision on whether or not to approve your application.

Needless to say, both will need to be quite impressive for a bank to consider giving you any amount of money with rates and terms that are manageable to boot. Unfortunately, that isn’t always the case and business owners who have, let’s say, “challenged” credit histories or whose business is struggling to add revenue may be forced to look elsewhere to obtain the capital necessary to grow their business or meet certain financial obligations by a specific deadline.

If the banks are refusing to do business with you, there are other avenues toward finding a good small business loan. Perform even a casual search online for alternative lenders and you’ll be inundated with names of companies that you may have never heard of before, yet are mostly reputable companies with good track records of providing loans and lines of credit to consumers who have been turned down by more traditional lenders.

Alternative Business Loans

Before you seek out this type of financing, you may want to consider if it’s the right fit first. These lenders usually offer loans at smaller amounts than those you may get from a bank, with terms, rates, and fees that are almost always less advantageous for the borrower than they are for the lender. The biggest concern for anyone seeking out this type of funding is the fact that the rates you’ll pay on this money are consistently higher than usual.  This is mainly due to the fact that these companies are targeting people with credit scores that will get them denied by banks and, more importantly, there are no current regulations in place to control how high the fees can get. So you may find interest rates as low as 6% just as readily as you will rates approaching 90%.

But on the plus side, these companies are willing to give you money in a much quicker period of time than traditional bank loans and many of them don’t require your business to have been in operation for very long. There is definitely a trade-off here, but for some business owners it’s not only worth it, but these options may be the only ones available to them. If you happen to be one of these individuals and you’re seeking out some badly needed financing for your business, take a look at the best business loan options for 2016.


If you are a business owner with bad credit, OnDeck may be the solution to your current cash flow problems. The company has been in business since 2007, catering to individuals who don’t have the credit histories required to get a loan from traditional lenders.

Though your FICO score is considered in their decision-making process, it’s not the only determining factor for approval. They take other elements under advisement such as monthly and annual revenue, cash flow, length of time the business has been operating, and other factors. One of the great advantages of using OnDeck is their fast, hassle-free application process which can be performed online or over the phone in the span of about 10 minutes in most cases.

Loan amounts range from as little as $5,000 to as much as $250,000 and up to $100,000 for a line of credit. Keep in mind that OnDeck offers secured loans only, so instead of collateral the company requires a general lien on your business and some form of personal guarantee. This may not be a suitable arrangement for all consumers.

Credit Score Requirements: 500 or higher for loans, 600 or higher for a line of credit.

Loan Amounts: $5,000 to $250,000

Terms: 3-12 months (short term loan) to 15-36 months (long term loan)

Rates: 9%-19% Total Interest Percentage on short term loans, as low as 5.99% and an average of 30% interest rate on long term loans

Time in Business: One Year minimum

Ready to Apply?


Another useful resource for fast cash with poor credit is Kabbage. But be warned, you may be paying an incredibly large amount of money in interest on that cash. What’s great about applying to Kabbage for a quick loan is that the company is ready to help when other lenders refuse to come through for whatever reason. In fact, your credit score plays a very small part in the approval process and, unlike most other financial institutions, there are no credit score minimums or requirements.

Kabbage looks at your credit history but it also examines data metrics from the interaction between your business and various accounts from Amazon, Facebook, Yahoo and a whole range of websites relevant to the type of business you own. There is no application to fill out, you just send the company links to a business checking account, bookkeeping software, or a payment platform such as PayPal. From there, Kabbage can get the information necessary for making a decision.

The fee structure for paying back the loan can get confusing as you’re not really paying interest but pre-determined fees at anywhere between 1%-12% for each month of a 6 or 12 month term. The fees can fluctuate and if you’re paying the loan off in a scant 6 months, that could really cost you a lot even if you borrow the minimum of $2,000.

Credit Score Requirements: None

Loan Amounts: $2,000 to $100,000

Terms: 6 or 12 months.

Rates: 32%-108%

Time in Business: One Year minimum

Ready to Apply?

Can Capital

Can Capital out of Kennesaw, Georgia has been around longer than just about all of the other loan companies on our list. Seventeen years of experience has made them one of the trailblazers in the alternative loan market and they offer three types of financing methods for small business owners: small business loans, merchant cash advances, and something they call TrakLoans.

The first is the same type of loan you can find at many of these lenders which is paid back through a fixed amount withdrawal taken from your bank account. The second and third are forms of a merchant cash advance (MCA), which means the company takes a percentage of every sale after it’s made through a payment processor. That percentage either comes from the sale itself or out of your bank account in much the same fashion as with a business loan.

Dealing with the company can also be a challenge as they aren’t immediately forthcoming about things like minimum credit scores and the amount of fees that you may need to ultimately pay on the money your borrow. Just be sure you go over any contract with a fine-tooth comb. Of course, anyone dealing with an alternative lender is going to expect to pay additional fees and higher costs than with a traditional bank. Just know that going in and you’ll likely have a very positive experience with Can Capital.

Credit Score Requirements: None? It’s somewhat unclear.

Loan Amounts: $2,500 to $250,000 for small business loans, $5,000 to $150,000 for MCA’s

Terms: 4 or 24 months for small business loans, None for MCA’s

Rates: 3%-50% for MCA’s

Time in Business: Four Months minimum

Ready to Apply?

business hand loansHeadway Capital

No hidden fees. Approvals made based upon the health of your business and not your credit score. Credit lines up to $35,000 and you can pay off your balance in full early without incurring any additional costs.

The folks at Headway Capital are making alternative lending simple and attractive by creating an experience that is as close to working with a traditional lender as you’re going to get without dealing directly with one. There are some restrictions however; your business must be located in one of the 22 states where Headway Capital conducts transactions and operating for a minimum of one year.

Much like with all the lenders on our list, they understand that your credit score is not fully indicative of the condition of your business, so they factor in other considerations based on tangible documents that give them a much clearer picture of the situation. These can include business bank account statements, corporate and personal tax returns, as well as profit and loss statements from your company. You can choose your payments to post weekly or monthly and Headway gives you three choices for loan repayment terms at 12, 18, and 24 months.

Credit Score Requirements: None.

Loan Amounts: $1,000-$35,000

Terms: 12, 18, or 24 months.

Rates: Up to 60% APR, 2% draw fee for every transaction

Time in Business: One Year Minimum

Ready to Apply?


A slightly different format than the previous lending solutions on the list so far, Biz2Credit is a lending marketplace that puts small business owners in touch with lenders who are looking to provide a whole range of financing options including SBA loans, business-acquisition and commercial loans, lines of credit, franchise loans, real estate financing, and merchant cash advances among others.

To gain access to the marketplace, all you have to do is complete an online profile with the company and you get immediate access to over 300 lenders. Filling out all the pertinent information requested will get your business and financing needs into the company’s analysis tool, which breaks it all down and then matches it to the criteria of the lending institutions in the network. The borrower is then given the various options of lenders willing to enter into a transaction with them based upon that information.

Since Biz2Credit is not a lender itself but instead a hub for lenders and borrowers to connect, the terms, rates, and requirements of a loan or line of credit can vary based upon each transaction.

Credit Score Requirements: Varied

Loan Amounts: Varied

Terms: Varied, typically anywhere from 6 to 18 months

Rates: Varied, typically anywhere from 12% to 40%

Time in Business: Varied, typically one year minimum

Ready to Apply?


SnapCap offers many of the same advantages that borrowers are looking for in alternative lending situations. Poor or insufficient credit and no collateral to put up, the need to be funded quickly, a simple and fast application process, all of these are part of the experience. They are another lender that understands that your credit history isn’t the full story of your current business situation, but with the additional advantage of not imposing some of the minimum requirements that other lending companies have in place.

For instance, there is no time in business requirement or annual sales revenue preconditions to qualify for a loan. The company also doesn’t require any sort of collateral component to close the transaction. SnapCap is probably the easiest online option to use with respect to figuring out what type of loan you may be eligible for based on your information. You can simply visit their website, punch in your credit score, desired amount, and loan terms and then compare what your rates and payments would be against other lenders. The company claims you can get an answer on your application in about 48 hours, but that may take longer based on how much money you are requesting.

Credit Score Requirements: None

Loan Amounts: Up to $250,000

Terms: 1 to 18 months

Rates: 19%-25%

Time in Business: None

Ready to Apply?

Swift Capital

Swift Capital specializes in offering merchant cash advances instead of standard business loans. That means some of the terms and repayment methods are going to differ slightly when determining your commitment and the money received from the transaction. You can borrow up to $300,000 and the maximum amount of time you’ll have to pay it all back is one year.

Even more encouraging is if you’re only seeking $10,000 or less you could very possibly have that money in just one hour. That’s a significant improvement on the typical 48 hours that most lenders of both business loans and MCA’s offer across the board. Swift is so sure they’re offering some of the best rates and financing conditions in the business, the company offers a Best Price Guarantee where they will beat the terms and rates of any other cash advance approval you may receive from a competitor or pay you $500.

There are some standard minimums in place as to credit score and time of operation of your business but nothing wildly out of the ordinary. Some consumers have complained that Swift will sometimes change the terms of their quote after the approval process has been performed, often without much if any communication. So be wary once you initiate an application and, if you’re unsure, always ask the right questions. If they can’t answer them for you up front and with clarity, move on to the next option on our list of lenders.

Credit Score Requirements: 550 or higher

Loan Amounts: $5,000 to $300,000

Terms: 3 to 12 months

Rates: Factor Rate of 1.099 to 1.25, 2.5% origination fee.

Time in Business: One Year minimum

Ready to Apply?

Lending Club

One of the newest companies on our list, Lending Club has been providing business loans since 2014 and began offering lines of credit as recently as last year. There isn’t really anything new or innovative about the company; they explicitly serve business owners in need of a quick infusion of capital without putting too fine an emphasis on credit history during the approval process.

Speaking of the approval process, the application to borrow from Lending Club has been designed for a hassle-free and rapid experience that can result in borrowers receiving their money in about a week. There is a five minute pre-qualification step that can tell you right up front if you have a shot at getting the money you need before you start supplying them with all of the necessary documentation that they use to make a decision. Those documents aren’t excessive either, relying on little more than three months of bank statements from your business account, the previous year’s business tax return, and you’ll need to fill out a Form 4506-T to authorize the company to obtain your business tax transcripts from the IRS.

Credit Score Requirements: 600 or higher

Loan Amounts: $5,000 to $300,000

Terms: 1 to 18 months

Rates: 1 to 5 years for small business loans, 25 months on lines of credit

Time in Business: Two Year minimum

Ready to Apply?

business arm computer moneyProsper

Prosper is another lending marketplace for peer to peer financing that has been in business since 2006. In that time, the company has matched lenders and borrowers to the tune of $5 billion in loans. The company does not provide any financing itself but puts individuals seeking financing in touch with lenders who are looking to provide various loans that fit certain underwriting criteria.

As is the case with most alternative lenders, credit scores and history aren’t the main determinant in whether or not you get the money that you are seeking, but it should be noted that Prosper does have the highest minimum credit score requirement of any company on our list at 640. So while it’s not a score that is going to exclude a large swath of potential borrowers, they do try to attract business owners who have FICO scores in the higher range of possibilities, with their average borrower at a score of around 705.

There are no major minimum requirements that need to be met other than the borrower’s credit score and the company is partnered with Experian to pull credit histories of potential customers. If your credit isn’t great and you are still approved, Prosper reports their loans to the major bureaus so you can rebuild your credit through the term of the loan. The application process is easy and once you’re in the system, Prosper will send you a list of potential loan offers and the specific interest rates, fees and loan terms of each.

Credit Score Requirements: 640 or higher

Loan Amounts: $2,000 to $35,000

Terms: 3 or 5 years

Rates: 5.99%-36%

Time in Business: None

Ready to Apply?

Our Final Thoughts

These are just some of the many different lenders that are online and ready to help you get the money you need. But after reading through these options, you may be thinking to yourself that you don’t really want to spend large amounts of money just to borrow a little bit of it, and there’s no denying that’s going to be the case with at least some of these companies.

If your situation isn’t as dire or urgent as to try these alternative loans, then you may want to wait and improve your chances with traditional banks by taking a few easy steps towards cleaning up your current financial standing. That starts with fixing your credit history and raising that FICO score. Your personal credit history can reflect poorly on that of your business since you are the owner, so getting that cleaned up is a great place to start. That may take some time depending on your situation, but it will be a major step to getting approved at a bank.

Additionally, being entirely transparent about how the money will be used can also work in your favor. Providing a business plan or sales pitch is a smart way to demonstrate where the money from that loan will be going. Where you decide to borrow from can help improve your chances as well, since some banks often provide larger amounts than financing companies. Sometimes the amount you need can help determine the best resource for getting that money, identifying the right lender in that regard can make all the difference.

Finally, be sure to weigh your options carefully. Do your homework and really seek out the best lenders for the money you need. One last thing, no matter who you ultimately decide to borrow from, always read your contract and be sure you know all of the fees, rates, and terms associated with your loan before you sign anything.

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