A private business loan is provided by an alternative funding source instead of a traditional brick-and-mortar bank. Funds can be used for working capital, equipment financing, commercial real estate and more.
| Loan amounts | $6,000 to $250,000 |
| Starting interest rate | Not disclosed |
| Term length | 6 or 12 months |
| Minimum credit score | 625 |
| Minimum time in business | 24 months |
High annual revenue needed to qualify
Businesses in Nevada, North Dakota or South Dakota aren’t eligible
Short repayment terms
Business owners looking for on-demand access to capital can consider Bluevine’s business line of credit. With speedy funding times and credit lines of up to $250,000, you can use funds for hiring staff, outsourcing payroll services, purchasing materials, renovating your office and more. Interest is charged only on amounts withdrawn — with no maintenance fees or prepayment penalties.Although Bluevine has a low credit score requirement, companies need a two-year business history and at least $480,000 in annual revenue to qualify. Note that certain industries and businesses in certain states are ineligible for a Bluevine business line of credit.
Read our Bluevine review.
| Loan amounts | $5,000 to $1,500,000 |
| Starting interest rate | 1.10 factor rate |
| Term length | 4 to 18 months |
| Minimum credit score | 570 |
| Minimum time in business | 6 months |
Short repayment terms
High annual revenue requirement
Doesn’t report to credit bureaus
Fora Financial is one of our top picks for a bad credit business loan with a low minimum credit score of 570 and only six months’ time in business required. Loans go as high as $1,500,000, allowing you to tackle a range of working capital expenses like buying equipment, maintaining cash flow, stocking up on inventory, opening a restaurant and more.Funding decisions are made within four to 24 hours, with funds hitting your business bank account within 24 to 72 hours. While Fora Financial doesn’t require collateral, it does charge a high origination fee. Businesses must generate at least $180,000 or more in annual revenue to qualify. Fora Financial also provides funding and resources for women-owned businesses and minority entrepreneurs.
Read our Fora Financial review.
| Loan amounts | Up to $150,000 |
| Starting interest rate | 4.66% for 12-week term 8.99% for 24-week term |
| Term length | 3 or 6 months |
| Minimum credit score | 600 |
| Minimum time in business | 6 months |
High annual revenue requirement
Short repayment terms
Doesn’t fund all industries
Newly established businesses typically struggle to qualify for traditional business financing since most banks impose strict eligibility requirements, such as needing at least two years in business to qualify. The good news is that Fundbox provides startup business financing to companies that have been running for only six months and with credit scores as low as 600.You can use a Fundbox line of credit to access up to $150,000, covering small business startup costs like registering your company, creating marketing campaigns, hiring staff and more. However, the short repayment terms could be a challenge depending on your business budget. Additionally, businesses need a minimum of $100,000 in annual revenue to qualify.
Read our Fundbox review.
| Loan amounts | $500 to $2,000,000 |
| Starting interest rate | 4.99% |
| Term length | 12 to 84 months |
| Minimum credit score | 550 |
| Minimum time in business | Startup |
Personal guarantee may be required
Charges a document fee (not publicly disclosed)
Stricter eligibility requirements to apply for equipment refinancing
Taycor Financial can help new and established businesses finance up to 100% of basic and heavy equipment costs with no down payment required. The equipment serves as collateral to reduce lender risk, allowing low-credit borrowers to unlock up to $2,000,000 in financing with no annual revenue requirements.Business owners can typically receive their funds within four to 24 hours after approval. Taycor offers several repayment options, including monthly, quarterly, deferred and semi-annual payments.
Read our Taycor Financial review.
| Loan amounts | $30,000 to $500,000 |
| Starting interest rate | 11.25% to 13.25% |
| Term length | 120 months |
| Minimum credit score | 650 |
| Minimum time in business | 24 months |
Also offers term loans and custom financing
High application and closing fees
Only offers variable rates for SBA loans
The Small Business Administration (SBA) guarantees a portion of all SBA loans, helping small business owners access the capital they need to grow and expand their companies. The SmartBiz platform is a great way to compare leading SBA lenders to find a competitive SBA 7(a) loan. Loan amounts go up to $500,000 and can be used for working capital expenses, business debt refinancing, commercial real estate purchases and more. While approval and processing times for traditional SBA loans can take months, SmartBiz offers a streamlined process that takes as little as seven days. Interest rates are capped by the SBA, but SmartBiz’s additional application and service fees can add up.
Read our SmartBiz review.
Here are five steps to help you get a small business loan with a private lender.
Creating a business budget can help you define your most crucial business expenses. While private loans for business can help with seasonal dips in income or allow you to invest in essential equipment, you want to avoid taking on too much debt. If in doubt, start off small to ensure you can keep up with the repayment schedule.
While criteria will vary by lender and loan type, here are some common business loan requirements you will likely need to meet when applying with a private lender:
It’s worth spending time researching private lending companies to find the best option for your business. Pay attention to extra service fees since these can significantly increase your loan’s overall costs. Also, make sure the lender reports payments to the major credit bureaus to help build your business credit.
Check out our guide to small-business lender reviews before applying to fully understand what each lender offers.
Private lenders should have a list of required documents on their website. If not, contact them for more guidance. Here’s a general list of what you may need to provide when applying for loans from private lenders:
While some traditional banks and credit unions require in-person appointments to finalize loan details, private business loan applications can be completed entirely online. Sometimes, a funding specialist will reach out to discuss loan options or to request additional information.
Since private lenders often utilize advanced underwriting software, it’s common to get a funding decision within minutes. Make sure to review your business loan agreement before signing the dotted line to ensure you understand the rates, repayment term and additional fees.
| Pros | Cons |
|---|---|
Generally easier to obtain than traditional lending options Funding within one to three business days after approval Low-credit borrowers and startups can typically qualify | Interest rates and additional fees tend to be higher You may be required to put up collateral or provide a personal guarantee Revenue requirements could create a barrier for some borrowers |
Almost all private business lenders accept online loan applications. Once you’ve gathered the necessary information, you can submit everything and expect a lending decision from there. Sometimes a lending specialist will call you to verify information.
Depending on the loan type and lender, you could receive funding in as little as one to seven days after approval.
Yes, you can research private lenders for business startup loans to see which options best fit your needs. Some lenders provide lines of credit to businesses that have been operating for less than two years. There are even banks willing to provide a loan to entrepreneurs with outstanding credit, appropriate collateral and an adequate cash flow.
Getting a startup loan with no moneycan be tricky since most lenders want to see at least six to 12 months in operation before taking a risk on you. However, some potential funding options include:
