As a gigster, you probably come across many situations where you need money that you don’t have on hand. You want to start a new business, but you need an expensive machine or equipment. Or maybe you want to expand a current business but don’t have the necessary capital.
Whether you want to start a new business idea, invest in real estate for a current business, or need funds for another reason, a small business loan can help you achieve your business goals.
This article discusses some common types of small business loans and the best lender options for finding financing today.
Key points to remember
- With the wide variety of small business loans, you’re sure to find one that meets your needs.
- Kabbage offers the most flexible loan options for small businesses.
- Fundera offers low-risk SBA loans to help businesses build credit.
- BlueVine provides small business loans to those with low credit scores.
- FundingCircle offers the best term loans for small businesses.
- Kiva provides the best microloans to unbanked borrowers.
- OnDeck offers term loans with the possibility of disbursement on the same day.
Types of Small Business Loans
Many financing options exist for small business loans. What’s best for you depends on your credit, collateral, and situation. Review the types of loans below to learn more about some of the more common types.
When they hear the word loan, most people think of a term loan. The lender gives the borrower a lump sum, which the borrower repays in fixed monthly installments with interest. Most auto loans, home loans, and personal loans fall into the term loan category.
Unlike some types of loans that limit where the money goes, term loans offer flexible financing for anything you might need. You can use a term loan to finance large equipment purchases, pay new employees, or cover day-to-day expenses.
Business owners purchase commercial real estate using commercial mortgages. These loans work the same way as other term loans with the lending of a lump sum and the repayment via fixed monthly installments. You can use a commercial mortgage to purchase commercial property, renovate an existing property, or even refinance another commercial real estate loan.
Backed by the government, Small Business Administration (SBA) loans provide capital at lower interest rates and less risk to the borrower. These loans are very useful, but the application process is often long. Approval for an SBA loan can take months, so reconsider this option if you need cash fast.
Commercial lines of credit
Many business owners are opting for lines of credit over traditional loans to borrow only what they need. Lines of credit offer revolving credit limits and only charge interest on what you withdraw. If you need variable amounts of money over a long period of time, a business line of credit can help you maintain your cash flow.
Business owners who need a small amount of money take out microloans of up to $50,000. Some microloan lenders charge ridiculously high interest rates, but you can find affordable microloan with the right lender.
The type of small business loan you need depends on your business and your circumstances. For example, an SBA loan may be the perfect financing option if you need a low-risk loan with low interest rates and fees.
Small Business Loans for Gigsters
Below you will find a list of the best small business loans offered by private lenders. These options include term loans, lines of credit, SBA loans, microloans, and loans with low credit score requirements.
Kabbage: the most flexible loans
If you need capital but aren’t sure how much, Kabbage offers a great solution. Kabbage customers are approved for a certain amount of financing, provided through a line of credit.
Since you don’t have to take out the entire loan amount all at once, you only pay interest on what you’ve spent. Kabbage provides maximum flexibility by allowing business owners to borrow what they need when they need it rather than taking out an excessive term loan.
Fundera: Best SBA Loans
If getting into debt makes you nervous, try an SBA loan for government support, lower interest rates and reduced fees. Fundera offers SBA loans to help small business owners with limited credit histories and lower credit scores.
BlueVine: Best loans for bad credit
BlueVine is another small business loan option if your credit score needs improvement. This private lender offers financing for small businesses with FICO scores as low as 530. If you need capital but don’t qualify for many loans, BlueVine can provide the financing you need.
FundingCircle: Best Term Loans
FundingCircle offers small business loans up to $250,000. They only require a minimum credit score of 600 and can offer same-day disbursement depending on where you live and your loan amount. However, business owners in Nevada, North Dakota, and South Dakota are not eligible for loans from FundingCircle.
FundingCircle doesn’t charge prepayment fees, so you won’t be penalized for making prepayments on your loan.
Kiva: the best microloans
If you’re an unbanked business owner, you’re probably struggling to qualify for business loans. Kiva offers interest-free microloans between $1,000 and $15,000 to help these business owners get the financing they need. Kiva does not require a minimum credit score, but they do need investors in the form of friends and family members.
OnDeck: the best same-day loans
If you need same-day financing, consider OnDeck. This private lender offers business owner loans with same-day disbursement (up to $100,000 in some states). OnDeck only requires a minimum credit score of 600 and offers loans up to $250,000.
Find a small business loan from these top lenders to jump-start your efforts to achieve your goals, whether you’re starting a new business or need capital for a current small business. If you’re looking for more tips for running a small business, click this link for some essential business financing advice from the small business banking experts at Nearside.