As a gigster, you likely come across many situations where you need money you don’t have on hand. You want to start a new business but need an expensive machine or piece of equipment. Or perhaps you want to expand a current business but don’t have the necessary capital.
Whether you want to launch a new business idea, invest in property for a current business, or need funds for another reason, a small business loan can help you reach your professional goals.
This article discusses some common types of small business loans and the best lender options for finding financing today.
- Key Takeaways
- Types of Small Business Loans
- Term Loans
- Commercial Mortgages
- SBA Loans
- Business Lines of Credit
- Small Business Loans for Gigsters
- Kabbage: Most Flexible Loans
- Fundera: Best SBA Loans
- BlueVine: Best Loans for Bad Credit
- FundingCircle: Best Term Loans
- Kiva: Best Microloans
- OnDeck: Best Same-Day Loans
- With the wide variety of small business loans, you’re sure to find one to suit your needs.
- Kabbage offers the most flexible loan options for small businesses.
- Fundera provides low-risk SBA loans to help businesses build credit.
- BlueVine grants 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 potential for same-day disbursement.
Types of Small Business Loans
Many financing options exist for small business loans. Which is best for you depends on your credit, collateral, and circumstances. Review the loan types below to learn about some of the most 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 payments with interest. Most auto loans, home mortgages, and personal loans fall into the term loan category.
Unlike some loan types that limit where the money goes, term loans offer flexible financing for whatever you may need. You may use a term loan to finance large equipment purchases, pay new employees, or cover daily expenses.
Business owners purchase commercial real estate using commercial mortgages. These loans function similarly to other term loans with the lending of a lump sum and repayment via fixed monthly payments. You might use a commercial mortgage to purchase business 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 prove very useful, but the application process is often long. It may take months to approve an SBA loan, so reconsider this option if you need money fast.
Business Lines of Credit
Many business owners opt for lines of credit over traditional loans to only borrow what they need. Lines of credit provide revolving credit limits and only charge interest on what you withdraw. If you need varying amounts of money over a long period, 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 an affordable microloan from the right lender.
The type of small business loan you need depends on your business and circumstances. For example, an SBA loan may provide the perfect financing option if you need a low-risk loan with modest interest rates and fees.
Small Business Loans for Gigsters
Below, you’ll 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: Most Flexible Loans
If you need capital but aren’t sure exactly how much, Kabbage offers a great solution. Kabbage customers get approved for a certain amount of funding, provided via a line of credit.
Because you don’t have to take out the entire loan amount at once, you only pay interest on what you’ve spent. Kabbage provides utmost flexibility by allowing business owners to borrow what they need as they need it rather than taking out an excessive term loan.
Fundera: Best SBA Loans
If going into debt makes you nervous, try an SBA loan to benefit from government backing, 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
Another small business loan option if your credit score needs boosting is BlueVine. This private lender offers financing to small business customers with FICO scores as low as 530. If you need capital but don’t qualify for many loans, BlueVine may provide the funding you need.
FundingCircle: Best Term Loans
FundingCircle provides small business loans of up to $250,000. They only require a minimum credit score of 600 and may 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 early repayments on your loan.
Kiva: Best Microloans
If you’re an unbanked business owner, you probably struggle to qualify for business loans. Kiva offers microloans between $1,000 and $15,000 with no interest to help such business owners get the funding they need. Kiva does not require a minimum credit score, but they do require investors in the form of friends and family members.
OnDeck: Best Same-Day Loans
If you need same-day funding, consider OnDeck. This private lender offers loans to business owners with the potential for same-day disbursement (up to $100,000 in certain states). OnDeck only requires a minimum credit score of 600 and offers loans up to $250,000.
Find a small business loan through these top lenders to jump-start your efforts to reach your goals, whether you’re taking on a new business venture or need capital for a current small business. If you’re looking for more tips for running a small business, click this link to discover some essential business finance tips from the small business banking experts at Nearside.