Starting or running a small business often comes with significant financial needs. Whether you’re just starting out or looking to expand, securing a loan can be an effective way to cover expenses such as equipment, inventory, marketing, or hiring employees. However, one of the biggest challenges entrepreneurs face is finding a loan with a low interest rate.
In this article, we will explore the best small business loans with low interest rates in 2025. We’ll go through different loan options, explain their benefits, and help you choose the best one for your business.
Why Low-Interest Loans Matter
When looking for funding, the interest rate can make a huge difference. A low interest rate means:
- Lower Repayment Costs: You pay less over the life of the loan.
- Improved Cash Flow: With less money going toward interest, you’ll have more funds available for operating your business.
- Faster Loan Payoff: You can pay off the loan more quickly without sacrificing business resources.
Before diving into the best loans available in 2024, let’s first review some of the most common small business loan options.
Types of Small Business Loans
There are various types of small business loans that cater to different needs. Here are the most common ones:
- Traditional Bank Loans
- Often the lowest interest rates.
- Requires good credit history and a proven business track record.
- SBA Loans
- Loans backed by the U.S. Small Business Administration.
- Low-interest rates, but a lengthy approval process.
- Online Lenders
- Faster application process.
- Higher interest rates than traditional loans, but still viable for many small businesses.
- Lines of Credit
- Flexible borrowing with lower interest rates.
- Suitable for businesses that need ongoing access to capital.
- Microloans
- Small loans typically under $50,000.
- Good for startups or businesses with limited access to traditional funding.
Now, let’s explore some of the best small business loan options with low interest rates available in 2024.
- SBA 7(a) Loan
The SBA 7(a) loan is one of the most popular financing options for small businesses. Backed by the U.S. Small Business Administration, it provides affordable loans with relatively low interest rates.
Key Features:
- Loan Amount: Up to $5 million.
- Interest Rates: Typically range from 5% to 10%, depending on the size and term of the loan.
- Repayment Terms: Can extend up to 25 years for real estate loans and 10 years for working capital.
Pros:
- Low Interest Rates: SBA loans are known for offering competitive interest rates.
- Longer Repayment Terms: Longer repayment terms result in lower monthly payments.
- Wide Range of Uses: SBA loans can be used for working capital, real estate, and other business-related expenses.
Cons:
- Long Approval Process: SBA loans take time to approve, often several weeks or months.
- Strict Eligibility Requirements: You need a good credit score and a solid business plan.
Ideal For: Established businesses that are looking to make large investments or expand their operations.
- Traditional Bank Loans
Traditional bank loans are often considered the gold standard for small business financing. They offer low interest rates but come with stricter qualifications.
Key Features:
- Loan Amount: Varies, typically up to $500,000 or more.
- Interest Rates: Can range from 4% to 8%, depending on the lender and your business profile.
- Repayment Terms: Typically up to 10 years, depending on the loan.
Pros:
- Low Interest Rates: Bank loans generally have the most competitive interest rates available.
- Large Loan Amounts: These loans can provide significant capital, perfect for larger business expenses.
- Flexible Repayment Terms: Repayment schedules can be customized.
Cons:
- Difficult to Qualify: You need a strong credit score (usually 680 or higher), solid financials, and a proven business history.
- Long Application Process: The process can take weeks, and approval is not guaranteed.
Ideal For: Established businesses with strong financials and a good credit history.
- OnDeck Short-Term Loan
OnDeck is an online lender that provides short-term loans to small businesses. While their interest rates can be higher than traditional bank loans, they offer fast access to capital.
Key Features:
- Loan Amount: Up to $250,000.
- Interest Rates: Typically range from 9% to 60%, but you can secure a lower rate if your business qualifies.
- Repayment Terms: Loans are typically repaid over 3 to 36 months.
Pros:
- Fast Funding: OnDeck offers quick funding, sometimes as fast as the next business day.
- Easy Application: Their online application is simple and easy to complete.
- Flexible Use: You can use the funds for any business need, including working capital, inventory, and marketing.
Cons:
- Higher Interest Rates: Compared to traditional bank loans, OnDeck’s rates can be higher.
- Shorter Repayment Terms: The repayment period is shorter, meaning higher monthly payments.
Ideal For: Small businesses that need quick access to capital and are confident in their ability to repay quickly.
- BlueVine Line of Credit
A line of credit is a flexible form of financing that allows businesses to borrow up to a certain limit and only pay interest on the amount used. BlueVine offers an excellent option for small businesses.
Key Features:
- Loan Amount: Up to $250,000.
- Interest Rates: Starting at 4.8% annual percentage rate (APR).
- Repayment Terms: Weekly repayments for 6 to 12 months.
Pros:
- Low APR: BlueVine offers one of the lowest APRs available for lines of credit.
- Flexibility: You can borrow as much as you need, up to your credit limit, and only pay interest on the amount used.
- Quick Access: Once approved, you can access funds quickly.
Cons:
- Short Repayment Terms: Weekly payments can be tough on cash flow for some businesses.
- Qualification Criteria: Requires a minimum of 6 months in business and a good credit score.
Ideal For: Businesses that need flexible access to funds and have steady cash flow.
- Kiva Microloans
If you’re just starting your business or need a small amount of funding, Kiva offers microloans with very low interest rates. Kiva is a non-profit organization that connects small business owners with a global network of lenders.
Key Features:
- Loan Amount: Up to $15,000.
- Interest Rates: Typically 0% interest, as Kiva is a nonprofit.
- Repayment Terms: Up to 36 months.
Pros:
- Zero Interest: Kiva’s loans come with no interest, making them one of the most affordable loan options.
- Global Community: You can access funding from lenders around the world.
- Flexible Use: You can use the loan for a variety of business needs.
Cons:
- Small Loan Amounts: The loan amounts are typically small, which may not be sufficient for larger business needs.
- Lengthy Approval Process: It can take some time to get your loan approved through Kiva’s platform.
Ideal For: Startups and small businesses with limited funding needs who want a community-based lending option.
- Fundbox Line of Credit
Fundbox offers a line of credit specifically for small businesses. Fundbox’s approval process is quick, and its interest rates are competitive.
Key Features:
- Loan Amount: Up to $150,000.
- Interest Rates: Starting at 4.66% weekly.
- Repayment Terms: Weekly payments for up to 24 weeks.
Pros:
- Quick Approval: Fundbox offers a quick and easy online application process.
- Low Initial APR: Compared to traditional loans, Fundbox offers competitive interest rates.
- Flexible Funding: Access capital as needed, with no set spending requirements.
Cons:
- Shorter Repayment Period: The weekly payments may be challenging for businesses with inconsistent cash flow.
- Credit Score Requirements: You will need at least a 600 credit score for approval.
Ideal For: Businesses that need quick access to capital and can handle weekly payments.
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Conclusion: Which Small Business Loan is Right for You?
When choosing a small business loan, it’s essential to evaluate your financial needs, business situation, and ability to repay. Here are a few key takeaways:
- SBA Loans: Best for established businesses needing large amounts of capital with low-interest rates.
- Traditional Bank Loans: Ideal for businesses with a strong financial history looking for competitive rates.
- OnDeck: Great for businesses that need fast funding, even if the interest rates are higher.
- BlueVine: Perfect for businesses seeking flexibility with low APR on lines of credit.
- Kiva: Excellent for startups or businesses with small funding needs and those who want 0% interest rates.
- Fundbox: Best for businesses that need quick access to capital and can manage weekly repayments.
In 2025, there are a wide variety of options for small businesses seeking funding. Take the time to research and compare your options carefully, and choose the loan that works best for your business’s goals and financial situation.
