Before we dive into the details of the best small business lenders of 2020, let’s take a step back and review the basics of some of the products we’ll be discussing. This way, you’ll have a better sense of what product might be the right fit for your business financing needs and will be able to direct your search for the best lender accordingly.

  • SBA loans: One of the best small business financing products on the market, SBA loans are actually obtained through banks and guaranteed by the SBA, or Small Business Administration. SBA loans offer longer repayment terms, large amounts, and low interest rates.
  • Medium-term loans: Typically acquired through online, alternative lenders, a medium-term loan refers to a loan product with a repayment term longer than one year. These loans can come from a range of small business lenders, with interest rates starting around 6%, and usually require monthly payments.
  • Short-term loans: Like medium-term loans, short-term loans are traditional loan products with terms shorter than a year, but they can include those with terms as long as 18 months. Short-term loans from online lenders are usually fast to fund, but they can have higher interest rates, or even calculate their rate as a “factor rate,” instead of a traditional APR or interest rate.
  • Business lines of credit: Lines of credit are going to be one of the most flexible financing products, allowing you to draw from a set pool of funds when you need capital. You’ll only pay interest when you withdraw funds, and once you repay the amount you’ve taken out, your limit will reset, similar to a credit card. Terms for a line of credit can range and generally, interest rates will start around 7% and increase depending on the lender and your credit score.

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *