Business loan interest rates and providers compare
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- Find out where you qualify including at Grow, Sprout Bancorp and PIG BANK
- Compare 30+ providers, from 2.3% interest
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Minimum loan amount $ 25,000. Borrow less? View Your options below.
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Want to know more about borrowing business money?
Finding the right lender for your company saves a lot of time and money in the long term. At corporate banking, we understand that every entrepreneur is unique. To help you in your search, we have listed everything you need to know about business loans. from a to Z.
Business loan compare
Am I eligible for a business loan?
The creditworthiness of Your company is the most important factor as to whether or not you are eligible for a business loan. Financially stable companies get a loan more easily, because banks and lenders run less risk with them.
It is important that you have sufficient cash flow available to repay the interest and principal each month . For example, if you borrow $ 50,000 (4.5% interest, 5 years term), you pay a fixed amount of $ 932 per month in repayment and interest. In that case, you must be able to demonstrate that for the next 5 years you have at least $ 932 (plus a buffer) in cash flow free per month to pay the financier.
In addition, many financiers apply two basic conditions:
- Your company has been in business for at least 1+ year
- You have an annual turnover of at least $ 50,000+
Some providers have less strict conditions, for example with Current10 you only have to be in business for 6+ months, instead of a year.
- Not even 1+ years in business or less than $ 50,000 in sales? You can borrow money from these providers.
Types of loans for SMEs
Just as there is a personal loan and revolving credit with private loans, there are also different types of loans that you can choose from.
A normal business loan is the most common form of loan. To be used for financing working capital or inventory, a renovation or, for example, a company takeover.
Online credit providers typically offer business loans of up to $ 1,000,000.
If you want to request a business loan from the bank, there is often a minimum loan of $ 1,000,000+. The term often varies from 12 to 60 months (1 to 5 years). Because many SMEs can no longer go to the bank, we see that they often request a business loan through alternative channels or through a credit broker.
- Loan Amount: Up to $ 1,000,000
- interest per year: 1.5% to 8.9%
- Suitable for: larger and long-term investments, usually one-off
Business credit (current account)
A credit line gives you access to flexible cash and can be compared to being overdrawn at the bank.
The lender will give you access to a specific amount (e.g. $ 50,000). You can withdraw money up to that limit, but you don't have to withdraw everything at once. You take out the business credit when you need it, and gradually pay it off over time by means of a monthly repayment.
You get a bit of flexibility, but you also pay for that. Often used for working capital financing.
- Credit Amount: $ 10,000 to $ 2,000,000
- interest per year: 4% to 25.2%
- Business credit is suitable for: financing growth / working capital, managing cash flow and short-term costs
With factoring, you will receive Your invoice immediately. You sell the invoice to a factoring company, which transfers the invoice amount to Your company account within 24 hours. They withhold a small part from the invoice amount to cover their costs.
Your debtor does not pay the invoice to you, but to the factoring company.
- Maximum credit amount: equal to Your company's turnover
- interest per year: 12% to 48%
- Suitable for: financing growth / working capital, managing cash flow and short term costs
It is customary to lease these when using large business assets and company cars. The advantage is that the value of the asset is more important than the performance of your company.
- Loan Amount: Up to $ 2,000,000
- interest per year: 4.5% to 8.5%
- Suitable for: financial and operational lease of business assets, and freeing up cash through sale & leaseback
Small Credit Corona
Interesting for small businesses: the government has instituted a special arrangement called Klein Krediet Corona. In addition, the government guarantees a 95% guarantee for a maximum of $ 750 million in bridging loan. Read more about this scheme at guideglobal.com .
Business loan interest
The business interest for a business loan is between 3.8% and 20% annually. The interest is determined on the basis of three factors: market interest rate, risk profile and collateral.
The basis of the interest rate determination is the market interest rate. The market interest is also called the purchase price of money: the interest rate that lenders themselves have to pay when they borrow money. In general, the higher the market interest rate, the higher the interest on Your loan.
The risk profile of the company applying for business credit is the most important factor in determining the business interest rate. The risk profile depends on the combination of a number of factors:
- business activities of the company and sector-specific key figures
- Financial key figures of the company, such as profitability, solvency and liquidity
Despite the fact that it is a business loan, the risk category also depends on the entrepreneur himself. For example, the bank looks at the entrepreneur's background and experience and his vision for the future. The entrepreneur's numerical insight, both historical and forecast, also play a role. However, an online lender will not look at the profile of the entrepreneur. The application runs completely online.
Collateral provides a security position for the lender. Some lenders require collateral. For example, are you applying for a loan for business premises, machines, inventory or vehicles? Then the assets for which the loan is taken out often serve as collateral. Collateral is not always required, but the advantage of collateral is that the lender has more security, and you therefore receive a lower interest rate. If you cannot pay off the loan, the disadvantage of collateral is that the lender is entitled to sell the collateral.If you cannot provide collateral, you will usually be asked for a personal guarantee. This means that you are privately liable for the loan if your company cannot repay the money.
Borrow business money quickly (under $ 25,000)
Do you need a small amount quickly? For example to manage your cash flow, to pre-finance a project or to purchase stock? There are more than a handful of lenders who provide short term business loans.
Advantages of a quick business loan:
- Requested within 10-20 minutes, few documents required
- Money in your account within 24-48 hours
- small amounts possible, from as little as $ 1,000
Disadvantages business emergency loan:
- interest rates from 11% to 72% per year
- maximum term usually 12 months
Business loan compare (short-term / small credit)
Need a small amount (<$ 25,000)? Or a loan with a short term (<1 year)? Use the comparator below to get a good indication of online providers and interest rates.
Need more than $ 25,000? Then compare via Loanstreet for 100% accurate interest. And they can usually arrange a better deal than you would get yourself directly.