Table of Contents
- The best business loans for under $100,000 stand out for being affordable, accessible to underserved communities or offering flexible terms
- Online lenders keep requirements relaxed, while banks and credit unions offer the lowest interest rates
- The SBA offers low-interest business loans to underserved businesses and entrepreneurs with bad credit
Many business owners find they need financing to start their business idea or expand to new products or a new customer base. But most small businesses don’t need hefty sums to achieve those goals. According to the 2023 Report on Employer Firms, 60 percent of businesses with employees keep their business loan debt to $100,000 or less.
You can find small business loans for under $100,000 from nearly any lender. But you may choose a lender based on the loan offer they’re willing to give you or their leniency toward your credit history. For example, traditional banks are more likely to give you low-interest loans, while online lenders may be more accepting of low revenue and subprime credit.
Here’s a look at seven of the best small business loans for under $100,000, including their loan amount ranges and business requirements.
Best small business loans under $100,000
|Lender||Best for||Loan amounts||Bankrate score|
|SBA loans||Affordable business loans||Up to $5.5 million||N/A|
|OnDeck||Short-term business loans||$5,000 to $250,000||4.5|
|Wells Fargo||Bank business lines of credit||$5,000 to $10 million||4.2|
|Fundible||Bad credit business loans||$5,000 to $10 million||4.7|
|SMB Compass||Low-interest business loans for good credit||$10,000 to $10 million||4.4|
|Accion Opportunity Fund||Low-interest business loans for bad credit||$5,000 to $100,000||4.0|
|Credibly||Working capital||$5,000 to $400,000||4.6|
SBA loans: Best for affordable business loans
SBA loans are business loans partially guaranteed by the Small Business Administration, offered through SBA-approved traditional and online lenders. SBA loans are ideal because they’re offered to businesses that don’t qualify for traditional financing.
The SBA also sets maximum interest rate limits that lenders can charge — currently up to 16.5 percent. These limits top out lower than many business owners would find with alternative business loans. You can choose from several loan programs matched to your business financing needs, including:
- SBA 7(a) loans: Used for general business expenses, loans up to $5 million
- SBA 504 loans: Used for real estate and equipment financing, up to $5.5 million
- SBA CAPlines: SBA-backed business lines of credit to cover expenses from specific work or construction projects or seasonal cost hikes
- For-profit U.S. business
- Be a small business by SBA size standards
- Unable to qualify for non-SBA business loans
- Financially able to repay the SBA loan
- Meet lender credit, time in business and revenue requirements
SBA Microloans and Community Advantage loans: Best for underserved communities
To close market gaps and serve businesses at a disadvantage for business loans, nonprofit and community-based lenders can provide SBA microloans or Community Advantage loans. These loans can be especially helpful to underserved communities, including women, minorities, immigrants and refugees.
SBA microloans often accept low personal credit scores like 500 or don’t have a credit requirement at all. They stick with small loan sizes maxed out at $50,000 and often require collateral or a personal guarantee stating that you’re held personally responsible for paying back the loan.
Like SBA microloans, Community Advantage loans are offered through an SBA-approved list of lenders and may offer extra business training and support. These loans cap at $350,000 and may not require collateral for loans under $50,000.
- For-profit, U.S.-based business
- Shows ability to repay the loan
- Personal credit scores in the 500s or up
- Live in specific communities like low-income or minority areas
- Potentially available for mentoring or training
OnDeck: Best for short-term business loans
OnDeck makes a point to offer two short-term business loans — business lines of credit and term loans — to businesses with fair credit and little experience. Small business owners need a personal credit score of 625 and just one year in business to get approved. And both loans offer short terms ranging from 18 to 24 months. While still short, its 24-month terms beat out many lenders that offer maximum loan terms ranging from six to 18 months.
You can also finance loans with starting limits of $5,000 for a term loan and $6,000 for a business line of credit. These low loan limits help business owners cover small expenses that they expect to pay back quickly. The tradeoff to OnDeck’s accessibility is that it charges high interest rates starting at 29.90 percent. Other lenders start in the 6 percent to 8 percent range as long as you have strong credit.
- 1 year in business
- Minimum of $100,000 in annual revenue
- Minimum personal credit score of 625
- Business bank account
- Not in Nevada, North Dakota or South Dakota
Wells Fargo: Best for bank business lines of credit
Wells Fargo is a force in the banking and business loan industry, particularly when offering business lines of credit. Its unsecured BusinessLine line of credit offers limits between $10,000 and $150,000 to businesses with two years of experience. If you’re a startup with strong credit, you could qualify for an SBA-guaranteed business line of credit up to $50,000.
Both the BusinessLine or SBA-backed Small Business Advantage line of credit immediately enroll you in Wells Fargo’s business rewards program. They come with a Mastercard to directly access money from available credit.
Outside these two options, well-established businesses with revenue from $2 million can get its Prime Line of Credit. This line offers credit limits as high as $1 million. While the Prime Line of Credit offers higher limits than the norm, its other two options provide less than the usual $250,000 for a line of credit.
- Personal credit score of 680 or higher
- Startups can qualify for (SBA-backed) Small Business Advantage Line of Credit
- Its other credit lines need at least two years in business
- Collateral or personal guarantee required
Fundible: Best for bad credit business loans
Fundible combines attractive loan options, features and accessible requirements all in one spot, either through direct lending or partners. The lender seeks to find financing even for business owners with personal credit scores in the 400 to 500 range.
To get a bad credit business loan, you can choose from Fundible’s equipment financing or invoice financing options up to $10 million, bridge loans up to $1 million or its business line of credit for up to $500,000.
Fundible’s credit criteria is relaxed even by online lending standards. Most online lenders require a minimum personal credit score of 600, and traditional lenders stick to minimum of 670 and up.
- 450 personal credit score
- 6 months in business
- $96,000 in annual revenue
- 600 personal credit score
- $200,000 to $250,000 in annual revenue
SMB Compass: Best for low-interest business loans for good credit
SMB Compass has a lineup of business loans provided to businesses at varying stages — but its best interest rates are reserved for strong credit borrowers. For example, its term loans start charging interest at 6.99 percent, and you can get loans anywhere from $25,000 to $5 million with terms up to 25 years. Business lines of credit start at a similar 7.99 percent interest rate with credit limits from $10,000 to $5 million.
While not unheard of, these low-interest business loans aren’t usual in the online space with many lenders starting interest rates in the double digits.
But each loan has different minimum credit and lending requirements. Term loans require personal credit scores of 680, six months in business and $500,000 in annual revenue. A line of credit requires a 600 credit score, $100,000 in annual revenue and two years in business.
Requirements vary by loan type, but its minimum criteria is:
- 6 months in business
- $100,000 in annual revenue
- Personal credit score of 600
Accion Opportunity Fund: Best for low-interest business loans for bad credit
Accion Opportunity Fund creates opportunities to fund small businesses pushed away by traditional lenders — and it does so with low-interest loans. Small business owners can get loan amounts of up to $100,000 with APRs from 5.99 percent to 17.99 percent.
As a nonprofit, it aims to strengthen small businesses through free mentoring and online education. It welcomes minority business owners, including individuals with only an Individual Taxpayer Identification Number.
Accion Opportunity Fund focuses on lending to businesses that don’t qualify for traditional business loans. The lender proudly approves people of color, women and low-to-moderate income business owners, which make up 90 percent of its clientele.
The lender states it looks at more than just your credit score and is willing to consider small business owners with credit scores of 550 and above. But if you have a low credit score, you’ll need to have consistent cash flow and several years in business.
Credibly: Best for working capital
Credibly’s specialty is working capital loans provided directly through the fintech lender, though you can get other loans through its lending network. You can tap its working capital loan to borrow anywhere from $5,000 to $400,000 with quick repayments from six to 18 months. Another choice is its merchant cash advance (MCA), which you repay based on your future expected debit or credit card sales. Its terms range from three to 18 months.
But the downside is that Credibly charges factor rates instead of interest, a fee that gets applied to the entire loan. Interest rates get charged on the principal amount as you go, so you can avoid interest by paying off the loan early.
- At least 6 months in business
- Personal credit score of 550
- $25,000 in monthly revenue ($300,000 annually)
- Business bank account showing revenue
- No bankruptcies within 3 years
How to get a business loan for $100,000 or less
To get approved for a business loan for $100,000 or less, lenders want to see that your business can successfully handle the loan you’re applying for. Let’s look at the steps involved to achieving this level of financing for your business’s growth.
Choose a business loan related to your funding need
First, consider how you plan to use the funding so you can match that purpose to the right loan. Because different loans have different lending requirements, the type of loan can affect your odds of approval. Also consider the kinds of assets you have and how you might use those to acquire a business loan.
A look at different types of loans you might choose:
- Business lines of credit: Reusable form of funding, typically with lenient requirements like a year in business and $100,000 in annual revenue
- Equipment loans: A loan secured by the equipment being financed as collateral, making it easier to qualify for
- Term loans: A loan with a set repayment schedule used for a defined purpose
- Asset-based or accounts receivable financing: A loan secured by assets like real estate, unpaid invoices or even intellectual property
- Merchant cash advances: An alternative business loan approved based on debit or credit card sales, usually used as a last resort when you can’t secure traditional financing
Find the lender with the best loan offer
Once you choose the loan that best matches the reason for your business financing, you can compare the best small business loans. Search for lenders offering low-interest loans, long repayment terms and any desirable features, such as having no prepayment penalty for paying the loan off early.
Most online lenders let you prequalify to see your loan offer without a hard pull on your credit. Also, consider lenders with excellent customer experience, providing personal loan specialists to help you choose a loan and complete your application.
Prove that you meet financial requirements
Every lender you compare will have different financial requirements for business loans for $100,000 or less. At this funding amount, lenders may keep the requirements light, such as requiring one year in business or $100,000 in annual revenue.
Lenders are looking for plenty of revenue to show that you can handle repayments. You can submit an in-depth business plan to improve your chances of success. That way lenders see how you strategically plan to grow and how much revenue you expect to make in the near future.
Fit payments in your budget
Getting approved for your small business loan is only one part of your business financing journey. Before signing the loan agreement, make sure you can manage payments by fitting the final number into your business budget.
You can use a business loan calculator to estimate payments even before you apply. Then, keep tabs on your overall budget and debt obligations and adjust as your business revenue rises and dips seasonally.
Alternatives to business loans under $100,000
It’s not in every business’s best interest to get a conventional loan and not everyone will qualify. Here are some alternatives to consider.
Business credit cards
Business credit cards can provide a recurring source of funds for expenses under $100,000. You don’t even need a formal business structure to apply, though the best business credit cards need strong credit. But the perk of business credit cards is that you can earn points redeemable for purchases or travel or cash back delivered to your business bank account.
If you pay the balance in full, you can take advantage of the card’s grace period and won’t be charged interest. That time period is usually at least 21 days from billing to payment due date.
A business grant is a chance to get free funding for your business. But you have to compete with other qualified businesses when applying. You have a better chance of getting awarded the grant if you narrow down to grants within your industry or demographic — that way you’re competing with fewer businesses.
For example, many nonprofits or private organizations offer grants to minority business owners. Other groups with business grants aimed specifically at a community:
You can also raise business funding through a crowdfunding campaign. Crowdfunding is fundraising money with no strings attached or with a small gift awarded to individuals who donate or invest in your business. You start by raising awareness about your business and funding needs through a crowdfunding platform like Kickstarter, Indiegogo or SeedInvest.
In an investing format, investors may want to see the progress the financing has allowed your business to make. Some platforms like Kiva mesh crowdfunding with peer-to-peer lending, letting you finance a business loan through individual investors. Kiva doesn’t charge interest for its loans, but other platforms might.
Business loans for under $100,000 can fund a variety of projects, including expanding your products or services or buying new equipment. This loan amount is common with lenders. To find the best small business loan for you, you can narrow down your options by thinking through the purpose of the funds and qualities you need from the lender.
For example, if you plan to pay off the loan quickly, you might want a short-term business loan or a loan with no prepayment penalty. You should also consider how much of a payment your business can manage to request a reasonable loan amount.
Frequently asked questions
Business loans of $100,000 or less are sizable, so lenders will want to see ample proof that you can repay the loan. Minimum requirements for loans this size can vary, but may be relaxed such as requiring low annual revenue of around $100,000. Lenders may look at your business’s debt service coverage ratio (DSCR) to compare your annual net income versus debt payments. They often look for a DSCR of 1.25 or higher showing plenty of revenue well above your debts.
Many fintech lenders accept personal credit scores of 600 and possibly lower for business loans under $100,000. But you typically need strong credit with traditional lenders, such as credit scores of 670 or higher. Some banks provide startup or credit-building loans. For example, Bank of America’s cash-secured business line of credit approves limits as low as $1,000. You need a $1,000 security deposit, but startups with as little as $50,000 in annual revenue are welcome.
Getting approved for a $50,000 business loan is easier compared to larger business loans. This loan size can be considered a microloan. Small loans pose less risk to the lender since they stand to lose less if you fail to make payments. While lenders may relax requirements when applying, they still expect to see that your business can comfortably manage the loan.