The effects of the COVID-19 pandemic continue to reverberate across all industries, communities, levels, and areas. Small businesses were particularly hit hard. If you found yourself in a precarious situation amid the crisis, and considered taking out a loan, you might understand what this entails.
However, this may be uncharted territory for new entrepreneurs who are seeking out business opportunities. Small business loans can provide you with a needed boost for cash flow, the purchase of materials, inventories, equipment, and ultimately, growth. At the same time, these loans still give you a sense of control over your business.
When deciding on which loan to opt for, you have to think carefully about how much you need, how long you think it will take for you to pay it back, your financial health, credit score, among other factors.
To help you make an informed decision, we have rounded up some of the best small business loans available today.
As a global nonprofit, Accion is devoted to helping entrepreneurs hit the ground running by aiding them in finding funding opportunities. Accion is a great lender for startups, as they understand entrepreneurs’ unique needs. They work closely with you and match which loans suit your diverse backgrounds best.
However, loan terms may differ depending on your state or location. There are minimal barriers to entry, especially in terms of credit scores as most of their offerings only require a score of 575. They also do not look into how long your business has been operating. APRs with Accion can be on the higher end of the spectrum, as their rates range from 7% to 34%. While they do not have prepayment penalties, there is a possibility of processing fees and closing costs.
Kabbage is a well-rounded option as it has flexible payment options, a simple application process, as well as fast funding. It is also quite advanced, with a toolkit that ranges from a unique mobile app to a business checking account.
There are no application fees for this loan, and they are quite transparent about their qualifications so you can find out right off the bat if you qualify.
Repayment terms range from six, twelve, or eighteen months and you do not have to worry about penalties for pre-payments or hidden fees. When you are approved, you can immediately access a line of credit via your bank account, card, or PayPal. Because it is so fast and simple to set up, Kabbage is an excellent choice for entrepreneurs who need capital instantly.
Fundera functions like a marketplace that allows comparisons of different loans, including personal ones. This is extremely beneficial for new startups who may not always qualify for a business loan. Once approved, you may have access to funding within two days, and get capital of up to 100% of your equipment’s value.
Funding with Fundera is also faster than applying for a loan with your bank. Aside from access to Small Business Administration (SBA) 7(a) loans, you will also have access to PPP, invoice factoring, term loans, among many others. Everything is consolidated in one simple application.
SmartBiz offers some of the best SBA loans, with amounts of up to $5 million. Thousands of business owners and entrepreneurs have made use of SmartBiz’s services, especially in terms of fulfilling their applications for SBA loans or bank term loans.
Rates can range between $30,000 to $5 million, with interest rates that begin at 4.75%. Repayment can be between 10 to 25 years as well.
Although requiring a lengthy process, you will get to work with professionals who will help you get the best deals and low-cost financing. As such, they also extend numerous forms of customer support to help ease you through the process.
Business owners who do not have particularly good credit ratings may go for OnDeck, as they require a minimum score of 600. One of the highlights of this lender is that if you qualify, you can access your funds within the same day because the company uses algorithms to make instant decisions, for your benefit. They have both short-term loans together with revolving lines of credit.
Loans with OnDeck may be on the pricier side with APRs of 9 to 98.3% for short-term loans, and 19.9% to 61.9% for revolving lines of credit. Repeat customers will also be rewarded with incentives such as reduced fees and lower rates.
Running a business is no easy feat––especially in the middle of a global pandemic. If you need that extra push or boost to see long-term business continuity or to push your growth further, a small business loan might just be an answered prayer. Here at AnyCredit, we have an entire section for you to peruse if you want to read up more on loans before you make a decision. Contact AnyCredit today for advice!