Small business loans: rates, terms, and how to qualify in 2026

Reviewed by Turan Zeynal, Managing Partner, Outset Funding Partners · Last reviewed August 9, 2026

TL;DR

Small business loans in 2026 run from $10,000 to $5 million. The five products that actually fund US small businesses are: 1) short-term working capital loans ($10k–$500k, 6–18 months, 15%–45% APR, funds in 24–72 hours), 2) business lines of credit ($10k–$250k, revolving, 12%–30% APR), 3) SBA 7(a) loans ($50k–$5M, 10–25 years, ~10.5%–13.5%, 30–90 days to close), 4) equipment financing ($15k–$2M, 24–72 months, secured by the equipment), and 5) revenue-based advances for 500–600 FICO files. Most approvals require 6+ months in business, $15,000+ in monthly revenue, and a 500+ FICO — bank and SBA money needs 680+ FICO and two years of filed returns.

Quick facts

Loan amounts: $10,000 – $5,000,000
APR range: 10.5% (SBA) – 45% (short-term)
Terms: 6 months – 25 years
Minimum time in business: 6 months (bank/SBA: 2 years)
Minimum monthly revenue: $15,000
Minimum FICO: 500 (best pricing at 680+)
Funding speed: 24 hours – 90 days by product
Collateral: Often none under $250k
Cost to check options: $0 — soft pull, no obligation

The 60-second answer

"Small business loan" isn't one product — it's five, and the one you should take depends almost entirely on two numbers: your FICO and how fast you need the money. A 700-FICO business with two years of filed returns and 45 days of runway should be looking at SBA or a bank line. A 560-FICO business with a payroll gap on Friday cannot use either, and pretending otherwise wastes the only week that matters.

Below is the honest cost and qualification picture for each product, followed by what underwriters actually check. We're a funding broker, not a lender — we submit your file selectively and tell you who saw it.

How it works, step by step

1. Short-term working capital loan — $10k–$500k, funds in 24–72 hours
Fixed daily or weekly payments over 6–18 months at roughly 15%–45% APR (often quoted as a factor rate of 1.15–1.49). Approvals hinge on bank deposits, not credit: 500+ FICO, 6+ months in business, $15,000+ monthly revenue. Best for inventory buys, payroll gaps, and jobs that repay the money inside a year. Worst for long-lived assets — you'll be paying it off long before the benefit shows up.
2. Business line of credit — $10k–$250k, revolving
Draw what you need, pay interest only on the drawn balance, at 12%–30% APR. Needs 600+ FICO and 12+ months of history for a real limit. This is the cheapest flexible option for a business with uneven receivables, and it's the product most operators should be building toward.
3. SBA 7(a) loan — $50k–$5M, cheapest money available
Government-guaranteed bank loans at roughly 10.5%–13.5% over 10–25 years. Requires 680+ FICO, two years of filed business returns, profitability, and 30–90 days of underwriting. If you qualify and can wait, nothing else comes close on cost. If you can't wait, do not let an SBA application block a bridge.
4. Equipment financing — $15k–$2M, secured by the asset
The equipment is the collateral, so credit requirements loosen: 600+ FICO funds most files, and 550 FICO still funds with a down payment. Terms of 24–72 months match the useful life of trucks, ovens, CNC machines, and medical devices. Section 179 depreciation often applies — ask your CPA.
5. Revenue-based advance (MCA) — the 500–600 FICO option
You sell a fixed percentage of future receivables. Fastest funding on the market and the most expensive: factor rates of 1.25–1.49 on 4–12 month terms. Legitimate as a one-time bridge with a clear repayment event. Dangerous when stacked — the second and third position are how businesses fail.

Who qualifies

•6+ months in business (2 years for bank and SBA loans)
•$15,000+ in monthly revenue, verifiable on bank statements
•500+ FICO for revenue-based products, 680+ for SBA and bank pricing
•A US business bank account with 3–6 months of statements
•No open bankruptcy; recent tax liens need a payment plan on file
•Under 3 existing advances — heavy stacking blocks most approvals

Which small business loan fits which situation

Option	When to use	Watch out for
Short-term working capital loan	Payroll gap, inventory buy, funded job — repays inside 12 months	Daily/weekly debits strain thin cash flow
Business line of credit	Uneven receivables, recurring seasonal dips	Needs 600+ FICO and 12 months of history for a usable limit
SBA 7(a)	Acquisition, real estate, refinancing expensive debt	30–90 days to close; 680+ FICO and filed returns required
Equipment financing	Trucks, kitchen equipment, machinery, medical devices	Only funds the asset, not general operating cash
Revenue-based advance	500–600 FICO, money needed this week	Most expensive option; never stack it

Frequently asked questions

What credit score do you need for a small business loan?

500 FICO is the practical floor for revenue-based and short-term working capital loans, which underwrite on bank deposits rather than credit. Lines of credit generally start at 600, and SBA 7(a) or bank term loans want 680+ with two years of filed business returns. Below 500, focus on 3–6 months of clean deposits before applying — that moves approval odds more than any score repair.

How much can a small business borrow?

Revenue-based and short-term lenders typically approve 80%–150% of one month's revenue, so a business doing $40,000 a month usually sees $30,000–$60,000. Lines of credit run $10,000–$250,000. SBA 7(a) goes to $5 million but is underwritten on cash flow coverage and collateral, not a revenue multiple.

How fast can a small business loan fund?

Revenue-based advances fund in 24–48 hours. Short-term working capital loans take 1–3 business days. Lines of credit take 3–10 days. SBA 7(a) takes 30–90 days. If your deadline is inside a week, only the first two are real options.

Can you get a small business loan with no collateral?

Yes. Most funding under $250,000 is unsecured in the traditional sense — no specific asset is pledged — though lenders almost always file a UCC-1 blanket lien and require a personal guarantee. Equipment financing and SBA loans over $500,000 are the main products that require named collateral.

Do small business loans require two years in business?

Banks and SBA lenders effectively do. Non-bank lenders don't: 6 months of operating history with $15,000+ in monthly deposits is enough for most short-term and revenue-based approvals. Startups under 6 months generally need equipment financing, a personal loan, or an SBA microloan instead.

What documents do lenders ask for?

For a fast approval: a one-page application, 3–6 months of business bank statements, a voided check, and a driver's license. Requests over $250,000 add a P&L, balance sheet, and business tax returns. SBA files add two years of personal and business returns, a debt schedule, and often a business plan.

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