Small business bank loans offer low interest rates and competitive repayment terms and here are some of the best to apply to in 2024.
Although qualifying can be difficult, banks remain the most common source of credit for small businesses — compared with options such as online lenders, community financial institutions and credit unions[1].
Business bank loans offer low interest rates, long repayment terms and can be used for a variety of purposes. The right bank for you should offer the small-business loan you need, as well as fund enough loans to make financing possible.
Here, we reviewed the best banks for small-business loans based on their commercial and industrial lending volume, product offerings and qualifications, among other features.
1. Bank of America
Best for: Customer relationships and loyalty programs.
Bank of America is the biggest commercial and industrial loan bank lender in the U.S. — according to data released by S&P Global Market Intelligence in June 2023 — surpassing the next closest lender by nearly $130 billion[2].
Bank of America business loans are a good choice if you value rewards and use other Bank of America or Merrill products. By meeting certain account requirements, you can qualify for interest rate discounts, no fees on wire transfers and other benefits. Bank of America may also make sense for loans for veterans and service members, as it offers them a 25% discount on loan administration or origination fees.
Here’s what Bank of America has to offer:
Term loans. Bank of America issues both fixed-rate secured and unsecured term loans. Its secured loan requires greater annual revenue: $250,000 versus $100,000 for the unsecured option. But it also offers higher borrowing limits — up to $250,000 — and a potentially lower interest rate. Both business loans require at least two years in business and can have repayment terms of up to five years, which is less than some other banks may offer.
Business lines of credit. Bank of America also offers secured and unsecured business lines of credit, with the same revenue requirements as its term loans. The secured line of credit comes with additional borrowing power — starting at $25,000 compared with $10,000 for the unsecured option. The borrowing maximum is not disclosed. Both have revolving terms, meaning you use the money as needed, that renew annually.
For newer businesses (those with at least six months in operation), Bank of America offers a cash secured business line of credit. With this product, you must provide a minimum initial deposit of $1,000 and these funds serve as your credit line. You can then use the line of credit to cover daily expenses, make regular payments and establish a positive account history — with the goal to transition to an unsecured business line of credit.
SBA loans. Bank of America is a preferred Small Business Administration lender, but other banks on this list are more active in issuing SBA loans. For example, Wells Fargo and U.S. Bank approve a higher number of 7(a) loans[3] — the most common type of SBA funding.
Other business loans. Bank of America offers business auto loans starting at $10,000 as well as commercial real estate loans and equipment loans, which both start at $25,000.
2. JP Morgan Chase
Best for: Variety of small-business products.
Chase offers small business loans, lines of credit and commercial real estate financing for small business owners in addition to checking accounts, credit cards and payment solutions.
Chase business loans include:
Term loans. Chase offers fixed-rate and adjustable-rate loans starting at $5,000 — which is less than lenders like Bank of America or PNC Bank — and repayment terms that can last up to seven years. Some small business loan options have amounts as high as $500,000 with no origination fee. However, a prepayment fee may apply for loans greater than $250,000 that are paid off early.
Business lines of credit. Chase has business and commercial lines of credit. Its business line of credit provides $10,000 to $500,000 in funding on a renewable five-year revolving term. The commercial line is $500,000 and up, with one- to two-year terms that may be renewed.
SBA loans. Chase is an SBA-preferred lender and funds multiple types of SBA loans. That includes SBA Express loans and credit lines, which offer faster funding of up to $500,000.
Other business loans. Chase offers commercial real estate loans with fixed or variable rates that start at $50,000. Terms are available for up to 25 years. Chase also gives you the option to pay back the loan on a standard repayment schedule — or make interest-only payments for a set period with a large payment at the end of the term.
3. Wells Fargo
Best for: SBA loans.
Wells Fargo offers SBA loans, multiple types of lines of credit and a variety of other types of business loans. However, some term loan programs have been discontinued so you may want to consider other options if a term loan is what you want.
Business lines of credit. Wells Fargo has three different lines of credit — two unsecured and one secured by collateral — ranging from $5,000 to $1 million. Credit lines of up to $150,000 have variable rates and are revolving. You’ll typically need at least $2 million to $10 million in annual sales to qualify for Wells Fargo’s most generous business line of credit. This line of credit has a one-year term. Fees vary by product.
SBA loans. Wells Fargo is one of the most active SBA loan lenders. In the 2023 fiscal year, the bank approved more than $427 million in SBA 7(a) loans[3].
Other business loans. Wells Fargo offers semi truck financing, equipment financing and commercial real estate purchase loans, as well as medical practice financing.
4. U.S. Bank
Best for: Startups.
U.S. Bank has fewer locations than other brick-and-mortar banks, including Chase and Wells Fargo. But if there’s a branch near you, U.S. Bank may be a good choice for startups, as you may be able to qualify for certain products with less than a year in business.
Term loans. U.S. Bank offers fixed-rate, secured term loans of up to $1 million. It also offers a fast business loan, which has a lower borrowing maximum ($250,000) but a quicker online application process. The Quick loan can be secured or unsecured and offers repayment terms of up to seven years. This product can be a good option for newer companies as you only need a minimum of six months in business to apply.
Business lines of credit. U.S. Bank’s business line of credit also goes up to $1 million and has an interest-only payment option. The bank’s revolving line of credit, called Cash Flow Manager, goes up to $250,000 and only requires a minimum of six months in business to qualify. That product has a $150 annual fee if the line of credit is less than $50,000.
SBA loans. U.S. Bank is another good choice if you’re in the market for an SBA loan. For fiscal year 2023, it approved 2,264 SBA 7(a) loan applications[3]. Plus, as a preferred lender you may be able to qualify for an SBA loan from U.S. Bank with fewer than two years in business.
Other business loans. U.S. Bank offers equipment loans of up to $1 million, and soft costs of up to 25% can be included. The bank has fixed- and variable-rate commercial real estate loans of up to $10 million with five-, 10- or 15-year repayment terms, with amortizations up to 25 years.
5. Citibank
Best for: Simple options and in-person service.
Citibank offers fewer business loan products than some other banks. If you prefer that simplicity, Citi might be the right option for you.
Citi can also be a good choice if you prefer an in-person, hand-on loan application experience. Whereas many banks offer at least some type of online application option, you can only apply for a business loan from Citi by visiting a branch location.
Term loans. Citibank’s term loan ranges from $5,000 to $5 million. Interest rates are fixed, terms last up to seven years and loans require a personal guarantee. Citi doesn’t offer a specific equipment loan, but term loans can be used for this purpose.
Business lines of credit. Citibank offers two business lines of credit, with amounts ranging from $10,000 to $5 million. Both lines come with variable interest rates and revolving terms and require a personal guarantee.
SBA loans. Citi is an SBA preferred lender and issues SBA loans and lines of credit to finance working capital and equipment, inventory, commercial real estate and other purchases. The lender doesn’t provide additional information on its website, so you’ll have to contact a lending representative to learn more.
Other business loans. Citi also provides specialized healthcare practice business loans from $250,000 to $5 million and commercial mortgage loans, with amounts ranging from $250,000 to $10 million.
6. PNC
Best for: Automatic loan payments.
PNC offers term loans, lines of credit, SBA loans and specialized financing for vehicles and commercial real estate — with payments automatically deducted from your PNC business checking account.
Term loans. PNC offers $20,000 to $100,000 for unsecured term loans and $100,001 and above for loans secured by collateral. Unsecured loans come with a fixed interest rate and terms of up to five years, whereas rates on secured loans can be fixed or variable and terms can last up to seven years.
Business lines of credit. The amounts for PNC’s lines of credit mirror the bank’s term loans, with unsecured options ranging from $20,000 to $100,000 and secured options of $100,001 and up. Both have variable interest rates and revolving terms. The unsecured line has an annual fee of $175, while the secured credit line charges 0.25% of the committed line amount.
SBA loans. PNC is a preferred SBA lender, but the bank is less active than others issuing these loans. For fiscal year 2023, PNC approved 669 SBA 7(a) loans, compared to Wells Fargo and U.S. Bank, which each approved over 2,100 in the 2023 fiscal year[3].
Other business loans. PNC business auto loans range from $10,000 to $250,000 with repayment terms up to six years. The bank’s commercial real estate loans come with fixed or variable interest rates, repayment terms up to 20 years (with up to a 25-year amortization) and financing amounts of $100,001 and up.
How to get a business loan from a bank
Although recent market conditions have led banks to tighten their lending standards, it’s still possible to access this type of business financing. Here’s what you need to get business loan from a bank:
An existing relationship
Most banks require you to have at least a business checking account at their institution. While you can simply open an account at some banks to meet this qualification, you can often benefit from a longer-term relationship. For example, you need an account with Wells Fargo for at least one year to apply for financing online.
Good credit
You’ll likely need a personal credit score in at least the 700s — although some lenders may be a little more flexible than others. Wells Fargo, for instance, accepts a minimum credit score of 680 for its unsecured line of credit.
Potential deal-breakers in your personal credit history could include too much debt, too many open accounts or negative marks — like late payments, loan defaults and bankruptcies. The bank will check your business credit score for similar red flags.
Strong revenue
When you apply for a small-business loan, the bank will look to see whether your business is in good shape and has enough revenue to support how much you want to borrow. For example, Bank of America’s unsecured business loans require at least $100,000 in annual revenue; its secured options increase that number to $250,000.
Enough time in business
Two years under the same ownership is the standard time in business requirement. But there are exceptions. For example, some U.S. Bank lending products are available if you’ve been in business for six months.
Collateral
You don’t necessarily need to put up business collateral like commercial property or equipment to get a bank loan. Some banks offer both unsecured and secured business loans. But the bank may fund larger amounts for secured loans, while also providing longer terms and lower interest rates to make payments more affordable.
Alternatives to bank business loans
If you can’t get a business loan from a big bank, consider these alternatives:
Community banks
Business loan applicants report higher approval rates with smaller banks than big-name financial institutions, as well as greater overall satisfaction, according to the Federal Reserve’s 2023 Report on Employer Firms[1]. However, the number of community banks is dwindling, and a local bank may lack the benefits you want — like online loan management or multiple locations.
Online lenders
Online business loans come with faster funding and higher approval rates than bank loans. Some online lenders even specialize in small-business loans. For example, for fiscal year 2023, Live Oak Bank, a digital bank, was the most-active SBA 7(a) lender by loan approval amount.
Online lenders are also less likely to require traditional collateral and may provide funding for newer businesses. But the trade-off will likely be higher costs than a traditional bank offers.
Microlenders
Nonprofit organizations offer microloans, and these can be a good choice for startups or small businesses that need working capital but can’t qualify for a bank business loan.
Microloans are typically less than $50,000 and can come with short repayment terms. Their costs may also be higher than a bank business loan.
Find the right business loan
The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. It’s well recommended that you compare small-business loans to find the right fit for your business.