Best Small Business Loans of 2022: Compare Financing | Business.org

Not all lenders describe loan costs in the same way. Some use an interest rate, while others use APR ( annual percentage rate , which includes interest and fees), while others use a draw rate (set fees). Make sure you understand how your lender describes its loan costs.

As you’ll see throughout this article, you’ve got tons of business financing options. So how do you choose the right lender and loan type for your business?

We suggest you consider a few key factors as you look at lenders:

  • Borrower requirements
  • Types of financing offered
  • Loan amounts
  • Rates and fees
  • Funding times

Borrower requirements may be the most obvious way to tell if a lender will work for you or not. After all, if a certain online lender only funds businesses that have been around for three years, and you’ve got a one-year-old business, you’ll know to move on to a different lender. The same applies to things like minimum credit scores and revenue requirements.

Then you can look at what kinds of financing a lender offers. If you have your heart set on a business term loan, for example, you won’t want to go with a lender that has just merchant cash advances. Likewise, if you just want a short-term loan to free up some cash flow, a lender with super long loan terms may not be the best fit. 

And of course, the same thing applies to loan amounts. You’ll want to find a lender that offers a large enough loan size for your small-business financing needs.

Once you’ve narrowed your choices down a bit, you’ll want to start looking at loan costs. In most cases, you’ll want to look for the lowest interest rates and fewest fees.

Finally, funding times can help you further narrow things down. If you’re not in a big rush, most lenders can work just fine. But if you need to grab a time-sensitive deal on inventory, for instance, then you’ll probably want a lender that can get you money ASAP.

So with all that in mind, let’s dive into our top lender recommendations.