Financing is part and parcel of operating a small business. To help you find the best of what’s available, U.S. News gives an overview of what it states are the best small business loans and lenders, including types of loans, how to prepare before you apply, how to get a loan, choosing a lender, the names of “the five best lenders,” the names of the five banks “that most actively approve SBA loans,” and what to do if you are denied a loan.
Small business loans are typically used to start a business, purchase inventory or equipment, purchase real estate or expand an existing business. According to the National Small Business Association, 69 percent of small businesses used financing in 2016, including loans, credit cards, venture capital and crowdfunding. The remaining 31 percent were not able to obtain adequate financing.
The NSBA report indicates small business loans are a key component of economic growth for small businesses and their employees. There is a direct correlation between small business financing access and the ability to hire employees.
Alternative lenders are increasingly lending to small businesses. According to data from the U.S. Small Business Administration, small business bank loans totaled nearly $ 600 billion in 2015. At the same time, lending from alternative sources such as finance companies and peer-to-peer, or P2P, marketplace lenders amounted to $ 593 billion. — U.S. News Staff