Small Business Loans: A Practical Guide for Growing Your Business

You know it's time to grow when your café is packed every weekend and customers keep asking about a second location. Or when your salon's booking calendar is full three weeks out, but your equipment is showing its age. The opportunity is there but so is that never-ending challenge: funding.

Let's be honest, most traditional banks aren't exactly rolling out the red carpet for owners looking to take small business loans. The good news? You've got real, practical options that work for local businesses like yours.

This guide skips the banking buzzwords and gets straight to what matters: how to get the financing option you need to grow your business. Whether you need loan amounts of $10,000 for new equipment or $100,000 for a second location, we'll walk you through the process step-by-step.

{{banner-cta}}

What are the best small business loans?

What works for some businesses won't work for others. For example, small business loans for startups aren't necessarily right for retail stores or service businesses. 

Let's look at the most common funding options, focusing on what really matters: how much you can borrow, what it takes to qualify, and which type of loan works best for different business needs.

Traditional bank loans

Traditional bank loans offer the lowest interest rates you'll find (typically 5-10%) and the longest repayment terms (up to 25 years). For established businesses with solid financials, they're often the best deal around. You can borrow anywhere from $10,000 to $500,000 or more, depending on your needs and qualifications.

Fair warning: getting approved isn't a quick process. You'll spend about a month jumping through paperwork hoops. But those low rates and comfortable repayment terms? They can make all that paperwork feel worth it in the end.

Chase

Chase offers term loans up to $500,000, business lines of credit, and SBA-backed loans. Businesses with an existing Chase banking relationship may qualify for discounted rates and faster approvals. Requires 2+ years in business, $250K+ in revenue, and a 680+ credit score for most loans.

Bank of America

The Bank of America offers unsecured term loans up to $100,000 and SBA loans up to $5 million. No collateral required for loans under $100K, but higher amounts will require assets or strong revenue. Best for businesses with strong cash flow and good credit (minimum 680+ score).

Wells Fargo

Wells Fargo provides secured and unsecured business lines of credit starting at $5,000 and SBA 7(a) and 504 loans for expansion, equipment, or real estate purchases. Best suited for businesses with at least two years in operation and consistent revenue of $100K+ per year.

U.S. Bank

The real estate specialist. If you're ready to buy a property or do major renovations, their SBA 504 loans often have the lowest down payments around.

Capital One

Capital One provides business term loans, equipment financing, and flexible credit lines. Loan terms vary based on revenue and creditworthiness, and Capital One often works with borrowers to structure loans to fit cash flow needs. Best for established businesses with tailored financing needs.

SBA (Small Business Administration) loans

Can't qualify for a traditional bank loan? That's where SBA loans come in. They're government-backed loans designed specifically for small businesses like yours. The government guarantees a portion of the loan, which means banks are more willing to work with you.

Here's what makes SBA loans special: 

• They require lower borrower contributions (often 10-20%) than traditional bank financing 
• SBA loans offer longer repayment terms (up to 25 years for real estate) 
• They have more flexible requirements for credit scores and collateral 
• SBA loans offer interest rate caps between 6-8% to protect you.

The most popular options are:

• SBA 7(a) loans: The go-to choice for most businesses. Borrow up to $5 million for almost any business purpose, like inventory, equipment, or working capital.
• SBA 504 loans: Perfect if you're ready to buy property or major equipment. You'll get lower down payments (around 10%) and fixed interest rates.
• SBA Express loans: Need money faster? These loans cap at $500,000 but have a much quicker turnaround, usually within 30 days.

The catch? Paperwork. Lots of it. But for many small businesses, the better terms make it worth the extra effort. Plus, you can work with many of the same banks we just mentioned because they all have dedicated SBA programs.

Private and fintech small business loans

Need money quickly, or can't meet traditional bank requirements? Online lenders and fintech companies are changing the game. These newer players have revolutionized small business lending with technology that can get you approved and funded in days, not months.

Here are some of the most reliable online lenders serving small businesses today:

Kabbage

Kabbage offers business lines of credit from $2,000 to $250,000 with quick approvals and rolling access to funds. Monthly fees range from 2%–9% per draw, and funding is typically available within days. Requires 560+ credit score, 12+ months in business, and $50K+ in annual revenue. Ideal for businesses that want flexible, on-demand financing without a large lump-sum loan.

BlueVine

BlueVine provides term loans up to $250,000 and revolving lines of credit up to $250,000, with funding in 24-48 hours. Requires 6+ months in business, $120K+ annual revenue, and a 600+ credit score. Offers more flexibility in repayment terms compared to other fintech lenders.

OnDeck

OnDeck offers term loans up to $250,000 and business lines of credit up to $100,000, with same-day approvals and funding within 24-48 hours. Requires 1+ year in business, $100K+ in annual revenue, and a 625+ credit score. Expect higher interest rates (starting at 35% APR), but ideal for businesses needing quick capital for cash flow gaps.

The trade-off? Higher interest rates, typically ranging from 10-30%. But for many business owners, the speed and convenience can be worth it. But make sure you read the fine print carefully. Some online lenders charge daily or weekly payments instead of monthly ones, which can strain your cash flow.

Community-based loans

Let's talk about one of the best-kept secrets in small business funding: community-based loans. These aren't just loans, they're investments in local businesses by people who actually care about your community's success. 

If you've ever felt like just another application number to big banks, this might be your answer.

Community-based lenders vary by state and region, but generally they include:

• Local credit unions that know your neighborhood and might even be customers.
• Community Development Financial Institutions (CDFIs) specifically designed to help small businesses thrive.
• Regional economic development organizations focused on growing the local economy.

These lenders typically offer loans between $5,000 and $250,000, with interest rates usually falling between traditional banks and online lenders (think 8-15%). 

But here's the real value: they often provide free business coaching and actually want to see you succeed. Look for any community lenders specialize in specific industries or neighborhoods. 

For example, if you run a restaurant in a historically underserved area, there might be a CDFI specifically focused on food service businesses in your community.

Nonprofit and microloans for small business

Sometimes you don't need a massive loan—you just need enough to upgrade that ancient POS system or finally get that delivery van. This is where nonprofit lenders and microloans shine. 

They're designed for smaller amounts (usually $500 to $50,000) that bigger banks often won't touch. And by repaying a loan that's smaller and more manageable, you not only sustain your own business but also support the growth of other small businesses in your community.

SBA Microloan Program 

The SBA Microloan Program offers loans up to $50,000 through nonprofit lenders, with interest rates typically ranging from 6%–9% and repayment terms up to 6 years. Designed for startups, women- and minority-owned businesses, and businesses needing smaller capital infusions. 

Available through SBA-approved nonprofit intermediaries like Accion and LiftFund.

Accion Opportunity Fund

Accion provides loans ranging from $5,000 to $250,000 with flexible underwriting and support for business coaching. Interest rates vary but typically range between 7%–30%. Best for women, minority, and immigrant entrepreneurs who may not qualify for traditional loans. 

Works nationwide, with a focus on small, community-driven businesses.

Kiva U.S. 

Kiva offers microloans up to $15,000 with 0% interest, funded through a crowdfunding platform. Borrowers must campaign for funding from friends, family, and Kiva’s network of lenders. No credit check required, but businesses need community support to reach their funding goal. 

Ideal for small startups, solo entrepreneurs, and businesses looking for low-risk funding.

Here's what makes these loans special: The application process often focuses more on your character and community standing than just your credit score. Yes, they'll look at your books, but they also want to know your story and your impact on the community. And while the rates and terms are great, these loans usually require more involvement from you. 

Expect to attend workshops, meet with mentors, or even do some community service. That extra support might be exactly what your business needs to level up.

Remember: Whether you're borrowing $5,000 or $500,000, staying on top of your finances is crucial. This is where tools like Homebase can help you keep your payroll and scheduling organized—which not only makes loan applications easier but also helps you make the most of whatever funding you secure.

What is the easiest small business loan to get?

When your walk-in cooler dies mid-summer or you need to replace critical equipment immediately, traditional bank loans aren't always the answer. While these emergency funding options typically carry higher interest rates than conventional loans, they offer quick approval and faster funding (often within 24-48 hours). 

Here's what you need to know about rapid-approval small business loans and alternative financing options that can keep your business moving forward.

The fastest routes to funding include:

• Online lenders & alternative financing: Get approved in hours with basic documentation and credit scores as low as 550. Expect loans from $5,000-$250,000 with terms from 3-18 months.
• Business credit cards (0% intro APR): Perfect for smaller expenses under $50,000. Many offer 0% intro APR periods and rewards on business purchases.
• Invoice factoring & merchant cash advances: Turn your outstanding invoices or future sales into immediate cash. Approval based on revenue, not credit score.
• Equipment financing: Use the equipment you're buying as collateral, making approval easier than traditional loans.

But here's what you really need to know: while these quick-funding options can be lifesavers in a pinch, they're best used as short-term solutions or bridges to more affordable financing. 

The key is having a clear plan for repayment before you sign. Can your daily sales cover aggressive payment schedules? Will this quick cash actually solve your problem, or just postpone it? These are the questions to ask yourself first.

What do I need to qualify for a small business loan?

Every small business owner knows the frustration: you're ready to expand, upgrade, or solve a pressing problem, but lenders seem to want everything short of your firstborn child to approve a loan. 

While requirements vary widely between lenders, understanding exactly what they're looking for can dramatically improve your chances of approval.

Here's what successful business owners and financial experts recommend for improving your chances of loan approval:

• Match your loan to your revenue patterns: "If your business has seasonal highs and lows, avoid loans with strict monthly payments. The right loan isn't just about interest rates—it's about flexibility." —Noel Griffith, CMO at SupplyGem.

• Build relationships with local lenders: "Credit unions consistently offer lower interest rates and more flexible terms than traditional banks. Our data shows businesses save an average of 2.5% on interest rates with credit unions." —Kevin Shahnazari, CEO of FinlyWealth.
• Prepare detailed cash flow projections: "I've seen success rates improve by 40% when retailers present detailed cash flow projections. Having a clear plan for using the loan money matters—show exactly how each dollar will help bring in more business." —Kunal Madan, founder of Amarra.
• Keep meticulous documentation: "For others running small businesses, I recommend keeping detailed records of your daily income and expenses. Showing lenders our consistent booking numbers and customer growth made a big difference in getting approved." —Joseph Passalacqua, CEO of Maid Sailors.

Lenders will want to see your payroll expenses, revenue history, and financial records before approving your loan. If you use a tool like Homebase for payroll and time tracking, you’ll have easy access to organized reports that can make the application process smoother.

What are alternatives to small business loans?

While strengthening your loan application is crucial, sometimes traditional loans aren't the best fit for your immediate needs. Let's explore alternative funding options that might work better for your business situation, especially if you're just starting out or need more flexible terms than conventional loans offer.

Here are proven alternatives that successful small businesses often use to fund growth:

Business credit cards: Best for expenses under $50,000. Many offer 0% intro APR periods and rewards on business purchases. Perfect for managing inventory purchases or covering short-term operational costs.

Industry-specific grants: "There are a ton of local and state programs out there that don't require repayment. It's just about doing the legwork to find them," says Paul Carlson, CPA and Managing Partner of Velocity.

Invoice factoring: Turn unpaid invoices into immediate cash. Particularly useful for B2B businesses or contractors dealing with long payment terms. Rates typically range from 1-3% per month, but you get paid right away.

Equipment financing: "One of my clients secured a $75,000 equipment loan with just 10% down, which preserved their working capital for other startup costs," shares Kunal Madan. Particularly valuable for restaurants, salons, and construction businesses.

Peer-to-peer lending: Platforms like Kiva and Funding Circle connect you directly with individual investors. "Organizations like Accion or Kiva offer smaller loans, sometimes as low as a few thousand dollars, and they're more flexible with credit requirements," notes Paul Carlson. 

While rates vary based on your credit profile, these platforms often offer more flexible terms than traditional banks.

Remember, the best funding option aligns with your business's cash flow patterns and growth timeline. Before pursuing any alternative financing, carefully compare total costs and payment terms. What seems convenient in the short term might be expensive in the long run.

Choosing the right loan for your business

"The right loan isn't just about interest rates—it's about getting the right money at the right time," says Noel Griffith. Whether you're opening a second location, upgrading equipment, or managing seasonal cash flow, your funding should match your business goals and revenue patterns.

Here's your action plan:

1. Assess your needs and timing.
2. Compare multiple options (traditional, SBA, and alternative funding).
3. Read the fine print, especially about payment terms and personal guarantees.
4. Consider working with a financial advisor to review terms.
5. Keep your documents organized with tools like Homebase.

Remember: A loan should be a stepping stone to growth, not a burden that holds you back. Take your time, do your research, and choose a funding option that helps your business thrive.

{{banner-cta}}