8 Best Low-Interest Small-Business Loans 2021

Best overall
Lendio
Lendio
  • Icon Pros  Dark
    Variety of loan options
  • Icon Pros  Dark
    One application for many lenders
Best for CDC/504 loans
Fundera
Fundera by Nerdwallet
  • Icon Pros  Dark
    Access to many loans and lenders
  • Icon Pros  Dark
    Several types of SBA loans
Best lines of credit
BlueVine
BlueVine
  • Icon Pros  Dark
    Credit line rates under 5%
  • Icon Pros  Dark
    Fast approval and funding
Best for fast term loans
Funding Circle
Funding Circle
  • Icon Pros  Dark
    Loan rates under 5%
  • Icon Pros  Dark
    Fast funding turnaround
Best for 0% interest
Kiva
Kiva
  • Icon Pros  Dark
    No-interest microloans
  • Icon Pros  Dark
    Few borrower requirements

Like any other type of loan, business loans can get pricey―and that’s unlikely to change anytime soon. Alternative lenders (aka online lenders) in particular often come with shockingly high interest rates.

So what’s a thrifty small-business owner supposed to do? Stick with more affordable, low-interest business loans, when possible.

We’ve rounded up the best small-business loans with (starting) interest rates under 7% (and some under 5%), so you can save money on your loan and still get the funding you need.

Money
Can you qualify?

Aside from Kiva, the lenders on this list tend to look for high credit scores, plenty of revenue, and several years in business. If that doesn’t describe you, we recommend looking at the best small-business loans for startups instead.

Best low-interest small-business loans

Compare the best low-interest business loans

Lender
Funding type
Lowest listed rate
Min./max. loan amount
Get a loan
LendioTerm loans6%$5,000/$2 million
FunderaSBA 7(a) loans & CDC/504 loans5%Up to $5 million
BlueVineLines of credit4.8%$5,000/$250,000
Funding CircleTerm loans4.99%$25,000/$500,000
KivaMicroloans0%Up to $15,000
SmartBizsBA 7(a) loans6%$30,000/$350,000
Bank of AmericaTerm loans & lines of credit3.5%Starting at $10,000
Wells FargoTerm loans & lines of creditPrime + 1%$5,000/$100,000

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Lendio: Best overall low-interest business loans

Lendio offers our overall favorite source of low-interest business loans.

It mostly comes down to Lendio’s model. See, it’s a lending marketplace rather than a lender. That matters. It means that Lendio actually partners with lenders rather than offering its own financing.

Lendio borrower requirements

Loan type
Min. credit score
Min. revenue
Min. time in business
Get a loan
Term loan550$50,000/yr.6 mos.

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

When you put in a loan application with Lendio, it uses that application to shop around with its partner lenders and find you the best deal. And we all know that comparison shopping is one of the best ways to save money. So when Lendio comes back with loan offers, you can compare things like interest rate, repayment term, and other factors to choose the one you like best.

Lendio works with quite a list of other lenders (including some that appear later in this list). It also has many different loan options. In other words, Lendio can help you get a lower rate by matching you with a loan option you might not have thought of yourself.

With loans and lenders galore, Lendio offers business owners a great way to save on interest rates through comparison shopping.

Fundera by Nerdwallet: Best for SBA CDC/504 loans

Government-backed SBA CDC/504 loans come with very low rates―and Fundera by Nerdwallet ("Fundera") offers one of the best options for applying to get them.

As a refresher, SBA 504 loans are a type of government-backed loan used to buy or upgrade assets. They can come in very large loan amounts (up to $5 million), and they have long repayment terms (up to 20 years). Even better? They come with very low, competitive rates―like 5% or 6% competitive. And like we said, Fundera makes it easy to apply.

Fundera borrower requirements

Loan type
Min. credit score
Min. revenue
Min. type in businesses
Get a loan
SBA 7(a) & CDC/504 loans680$180,000/yr.4 yrs.

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

See, Fundera works a lot like Lendio, in that it’s a lending marketplace that shops around for you and lets you compare loan offers―including for the SBA CDC/504 loan program. That makes it possible to get the best possible deal on an already-competitive loan. Just keep in mind that lending marketplaces, as a rule, can make loan applications take longer than other lenders―and SBA loans can take a long time on top of that.

Even so, the low rates on SBA 504 loans through Fundera are very likely worth your wait.

BlueVine: Best for lines of credit

Think you might prefer a business line of credit to a term loan? Then BlueVine might be the lender you’re looking for.

BlueVine offers very affordable lines of credit. (It offers invoice factoring too, but that tends to be a costlier financing option.) Unlike term loans, lines of credit let you repay the money you borrow and then borrow again (not unlike a credit card). That makes credit lines a great solution for cash flow problems, as you can keep borrowing and repaying as much as you need.

BlueVine borrower requirements

Loan type
Min. credit score
Min. revenue
Min. type in businesses
Get a loan
Line of credit650$30,000/mo.2 yrs.

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Like we said, BlueVine credit lines don’t have to cost a ton. Interest rates on BlueVine lines of credit start at less than 5%―one of the lowest starting rates on this list. Just keep in mind that BlueVine credit lines come in smaller loan amounts than other lenders here. For basic cash flow needs, that shouldn’t be a problem. For a big, pricey project, though, you might prefer a larger bank loan.

But if cash flow financing sounds good to you, then you’ll like the low interest on BlueVine lines of credit.

Funding Circle: Best for fast term loans

Don’t have time to sit around and wait for a small-business loan? Let’s talk Funding Circle.

While lending marketplaces like Lendio and Fundera are great, they can take days to match you―and that’s before you submit a final loan application and get approved. Funding Circle works faster. It’s a direct lender, so it makes its own lending decisions. In fact, you can get approved in less than 24 hours, and funded the day after that. (BlueVine also has fast funding, but it doesn’t do term loans.)

Funding Circle borrower requirements

Loan type
Min. credit score
Min. revenue
Min. type in businesses
Get a loan
Term loan660Unlisted2 yrs.

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Don’t worry, though. This isn’t one of those times where you have to pay for speed and convenience. Funding Circle term loan rates start under 5%. So you’re still able to get a great deal on your business financing―you’re just getting a great deal faster than you would from other lenders.

So go ahead and submit your loan application with Funding Circle, and enjoy getting faster financing.

Kiva: Best for no-interest microloans

Kiva works really, really differently than other lenders on this list―as shown by the fact that it doesn’t charge any interest.

You read that right. Kiva has the lowest loan rates of any lender on this ranking, because it doesn’t actually charge interest (or fees, for that matter). You simply repay your loan amount. Yes, you still have to make regular payments and repay your loan balance within your repayment term. You just don’t have to worry about an interest rate―high or otherwise.

Kiva borrower requirements

Loan type
Min. credit score
Min. revenue
Min. type in businesses
Get a loan
MicroloanN/AN/AN/A

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

There are some catches. First, Kiva loans come in small loan amounts. Like microloans of less than $15,000 small. Second, Kiva uses a crowdfunding process to fund your loan. It takes over a month to get through its financing process, and you’ll have to convince people your business deserves to get funded. (On the plus side, that means that Kiva doesn’t really care about things like your credit score or revenue.)

Still, if you can handle small loan amounts and a long funding time, you won’t find a cheaper loan option than Kiva’s no-interest microloans.

Honorable mentions

SmartBiz: Best for SBA 7(a) loans

SmartBiz focuses on SBA 7(a) loans, which get backed by the US Small Business Administration. Like other types of SBA loans (including those offered by Fundera), that means that you’ll benefit from low starting loan rates―not to mention interest rate caps. While specific rates change over time (SBA rates are tied to the Prime Rate), working capital 7(a) loans often start around 6% to 7%.

SmartBiz borrower requirements

Loan type
Min. credit score
Min. revenue
Min. type in businesses
Get a loan
SBA 7(a) loan640$100,000/yr.2 yrs.

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

By the way, SmartBiz works kind of like Lendio and Fundera. It’s another lending marketplace, but (as we said) it specializes in SBA 7(a) loans. That means you get all the benefits of a lending marketplace (like competitive offers).

So if you’re interested in SBA 7(a) loans, start your loan application with SmartBiz.

Bank of America: Lowest starting rates

If you want the lowest possible rates (and have the credit score and other requirements to qualify), then you need to look at Bank of America business loans. Bank of America offers both term loans and lines of credit, with both types of financing starting at rock-bottom rates beneath 5%―and that goes for both secured and unsecured loans (loans that do and don’t require collateral).

Bank of America borrower requirements

Loan type
Min. credit score
Min. revenue
Min. type in businesses
Get a loan
Unsecured loan or line of creditUnlisted$100,000/yr.2 yrs.
Secured loan or line of creditUnlisted$250,000/yr.2 yrs.

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

As an added bonus, Bank of America power users can earn further interest rate discounts through the Relationship Rewards program. (You need $20,000 in Bank of America bank accounts to qualify.)

For ultra-low loan rates on several types of financing, you need to check out Bank of America.

Wells Fargo: Best for very established businesses

Has your business been around for years? Do you have a great personal credit score―and maybe strong business credit as well? Then you just might qualify for Wells Fargo business loans. Wells Fargo is one of the pickiest lenders out there. For example, while it no longer lists a specific time-in-business requirement, it’s historically required businesses to be at least three years old to get a bank loan.

Wells Fargo borrower requirements

Loan type
Min. credit score
Min. revenue
Min. time in business
Get a loan
Term loans & lines of credit"Strong"$1.50 for every $1.00 borrowed"Longer history"

Data effective 2/1/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Of course, the upside is that Wells Fargo offers many types of financing, most of which come with very low, competitive rates. It’s a very affordable lender―but with such strict borrower requirements, it’s not always worth submitting a loan application.

If you’ve got the credentials, though, a Wells Fargo term loan or line of credit can get you affordable financing at low rates.

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Other low-interest business loan options

In some circumstances, you can get even lower rates through special SBA loans.

Take SBA disaster loans, including Economic Injury Disaster Loans (EIDLs). These can have special low rates. For example, recent EIDLs issued in response to the COVID-19 pandemic had rates between 2.75% and 3.75%.

Likewise, Paycheck Protection Program (PPP) loans have a low interest rate of 1%. (This includes both first and second-round PPP loans.) And, of course, they qualify for loan forgiveness in some circumstances, saving you even more money.

If you qualify for these special low-interest loans, they’ll likely be the cheapest financing options you can get. So by all means, get them. But if they’re not available to you, the working capital loans above provide a good alternative.

Low-interest business loans FAQ

Which bank offers the lowest interest rate on business loans?

Banks change and adjust their interest rates from time to time, so it’s hard to say which bank has the absolute lowest business loan rates.

That said, we consistently see very low interest rates from Bank of America and Wells Fargo, even when compared to other big banks.

What is the average interest rate for small-business loans?

Unfortunately, we can’t give you a specific average interest rate for business loans―because the data simply doesn’t exist. (Trust us, we’ve tried to find a reliable stat many, many times.)

And frankly, the average interest rate might not be as helpful as you think. After all, interest rates depend on your loan type, repayment terms, loan amount, borrower qualifications, and more. So comparing interest rates on a $4 million business loan with a 10-year repayment term and a $10,000 business loan with a 6-month repayment term really won’t tell you that much.

We can give you some general ranges though. Bank loans generally have starting rates under 8%, with loan rates maxing out in the high 20s. Business loans from alternative lenders usually start and end at a slightly higher range―think 9% to 40% or so.

(Other types of financing, like merchant cash advances and invoice factoring, don’t use interest rates―but they almost always cost way more than term loans.)

Is getting a business loan a good idea?

Whether or not a business loan is a good idea really depends on your specific situation.

If you’re using your business loan to do something that will increase your revenue―like hire a new employee or two, boost your inventory, or invest in marketing―then a business loan can make a lot of sense. Well, as long as it fits in your budget.

But if you’re getting a business loan to avoid financial disaster or bankruptcy, you should think carefully before submitting a loan application. The last thing you want is to end up with more debt you can’t pay―not to mention your business and personal assets at risk (if your loan has a personal guarantee).

What is the easiest business loan to get?

For most business owners, we recommend a Fundbox line of credit as one of the easiest types of business financing to qualify for.

Fundbox has very low borrower requirements. It accepts a credit score as low as 500, for example, and a business age of less than six months.

Keep in mind that easy-to-get business loans usually cost more, and Fundbox is no exception. But if you’re just concerned about qualifying, you’ve got a good shot with Fundbox.

The takeaway

You can save a lot of money by looking for low business loan rates. And we’ve done the hard part for you, rounding up lenders that offer affordable interest rates on small-business financing.

So go ahead and get that working capital loan―and enjoy your low rate.

Want to see more business loan options? Check out our roundup of the best-small business loans to see our favorites.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
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