Best small business loans of November 2025

Term loan

• Speed: ★★★★☆
• Cost: ★★★★★
• Requirements: ★★★☆☆
• Funding amounts: ★★★★★

The most common type of business loan among startups and established companies, term loans let you borrow a lump sum to cover business expenses. You then repay the loan over the agreed-on repayment term with interest. Term loans are accessible through most banks and credit unions, and loan amounts range from $1,000 to the millions. 

To qualify for a term loan, you’ll likely have to generate a sizable amount of revenue and provide a personal guarantee to qualify for funding. Plus, you can expect higher borrowing costs if you’re starting out in your business. 

Best for:

• Large purchases
• Lower fees
• Specific purchases or projects

Line of credit

• Speed: ★★★★☆
• Cost: ★★★★★
• Requirements: ★★★★☆
• Funding amounts: ★★★★☆

Lines of credit provide access to a pool of funds you can repeatedly draw from up to your credit limit. While a term loan charges interest on the total borrowed amount the moment you receive funds, with a line of credit, you only pay interest on the funds you use. You also have the flexibility to withdraw more funds as you have more credit available, such as after you repay past loans.

There are drawbacks, including the limited draw period or time frame that you get to access the line of credit before it closes. The upside is that some lenders allow you to make interest-only payments during the draw period, which can be beneficial if you’re trying to get your company’s cash flow back on track.

Best for:

• Operational needs
• Short-term financing
• Flexible financing

SBA loan

• Speed: ★★☆☆☆
• Cost: ★★★★★
• Requirements: ★★★☆☆
• Funding amounts: ★★★★☆

Backed by the Small Business Administration, SBA loans are loan products featuring competitive rates and generous loan terms to meet the needs of small business owners. They’re accessible through SBA-approved lenders you can locate through the SBA Lender Match Tool, but they come with a few downsides. 

Though the SBA’s intention is to provide small business owners with the funding they need, SBA loans come with an application process that’s challenging to navigate. Plus, it could be several months before the loan proceeds are disbursed to you. 

Best for:

• Cash shortfalls
• Lower fees
• Large, one-time purchases or projects

Equipment financing

• Speed: ★★★★☆
• Cost: ★★★★☆
• Requirements: ★★★★☆
• Funding amounts: ★★★★★

Equipment loans let business owners purchase business-related equipment such as machinery, office furniture, tools and computers. This type of loan can be beneficial if you don’t have the funds available to cover the costs of vital resources to keep your business operating efficiently.

Business owners should collateral for the loan, interest rates tend to be more favorable compared to unsecured term loans. Lenders are also more likely to approve startups and bad credit borrowers, making equipment loans accessible to more business owners.

Best for:

• Equipment purchases
• Low-credit/revenue funding

Invoice financing and factoring

• Speed: ★★★★★
• Cost: ★★☆☆☆
• Requirements: ★★★★☆
• Funding amounts: ★★★☆☆

Both invoice financing and invoice factoring allow you to borrow against your unpaid receivables. They’re both accessible types of business loans, often open to startups and bad-credit borrowers. To get approved for these loans, lenders are more concerned with the creditworthiness and repayment history of your invoiced clients. 

There’s a key difference between the two. Invoice financing involves receiving an advance of your company’s accounts receivables that you’ll repay the amount borrowed (plus fees) once the client pays you. 

If you choose invoice factoring, you’ll sell the outstanding invoices directly to the lender in exchange for a lump sum of up to 90 percent of what’s owed. The client will pay the lender directly, and any amount that remains after fees are deducted will be distributed to you.

Best for:

• Fast financing
• Bad credit financing

Microloans

These loans are available as SBA-approved microloans or through non-profits, banks and online lenders offering their own microloan programs. With most microloans, you can access up to $50,000 in working capital or startup funding for your business. 

These loans tend to relax eligibility requirements by accepting lower credit scores, making them a more accessible type of loan. Some lenders will also offer mentoring and resources to help your business succeed beyond finances.

Commercial real estate loan

You can use a commercial real estate loan to purchase or lease a physical space for your company. Some lenders offer up to $5 million in funding with extended repayment periods and competitive interest rates.

Qualifying may be difficult if you’re starting out or your revenue is on the lower end. Plus, you can expect a lengthy application process.

Merchant cash advance

You can access funding to meet your company’s short-term needs with a merchant cash advance. Funds are disbursed in a lump sum and payable to the lender through a percentage of your daily or weekly sales — typically over a short loan term of one year or less. Lenders use your debit and credit card sales volume to determine the amount you’re eligible to borrow, so bad credit isn’t necessarily a deal-breaker. 

Merchant cash advances are a type of bad credit business loan. Instead of interest rates, it charges factor rates. These typically come with faster repayment terms and may even end up costing more than comparable loans that use interest rates.