The Best Business Loans of 2023

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How Did We Choose the Best Business Loans?

The business loan companies we’ve discussed facilitate loans for small and large companies. These loans are available in varying sizes with terms that suit the needs of individual business owners. We evaluated these companies on the most important aspects of business funding — loan amount, repayment terms, time to fund, minimum annual revenue, and fees.

What Is a Business Loan?

Business loans are loans companies use for business purposes. These loans may provide a business with working capital, debt refinancing, and, in some cases, to buy real estate.

Types of business loans include traditional loans, business lines of credit, and invoice factoring.

• Traditional loans provide a lump sum upfront, which is often deposited directly into a company’s business account, and then borrowers repay the loans in monthly increments.
• Credit lines allow businesses to draw funds up to the borrower’s approved credit limit as needed.
• Invoice factoring takes over debt that’s owed to a business and provides immediate funds to the company.

Interest rates and repayment terms vary widely based on factors such as the borrower’s credit score, length of time in business, and the lending organization’s specific terms. There are loan options for businesses at almost any time in business, ranging from startups to long-term companies that have been operating for decades.

How To Choose a Business Loan

Each business is unique and has equally unique funding needs, which means there are some specific details for each borrower to consider, including the amount needed, the price of the funding, the repayment terms, and how long it takes to get the funds.

• Amount needed: One of the first things to consider when hunting for a business loan is the amount of money needed. Business loans may range from an amount as small as $25 to $5,000,000, so knowing how much is needed helps a borrower navigate to a lender who handles transactions of the right size.
• Cost of the funding: The cost of the funding for a business loan includes the origination fee and the interest rate. Some lenders do not require an origination fee, and others may waive the interest fee.
• Repayment terms: The repayment terms include how long the borrower has to repay the money, how much the payment is, and if the borrower has the option to repay early without a penalty.

Knowing the minimum credit score and annual revenue required by a lender, as well as the minimum amount of time a borrower must be in business to work with the lender, can help a business owner choose a lender who is most likely to approve their business loan application.