While there is no shortage of lenders offering private commercial loans, perhaps the most coveted form of business financing is the family of loans backed by the U.S. Small Business Administration, or SBA. That’s because SBA loans offer better rates, lower fees, longer terms, and more flexible qualification terms and down payments.
Although these loans are secured by the SBA, they are directly provided by banks, credit unions, and other lending organizations, so there are as many varieties of SBA loan packages as there are institutions providing SBA loans. We’ve researched more than 30 of the most active SBA lenders to find the winners in eight categories.
All of the lenders we considered and that are highlighted below are SBA Preferred Lenders. Choosing a Preferred Lender significantly shortens how long the loan approval and funding process take.
The 8 Best SBA Lenders for 2021
Best Overall: Live Oak Bank
As the biggest SBA 7(a) lender in the country, Live Oak Bank is a well-oiled loan-making machine that offers a variety of small business financing options, a solid online experience, competitive rates, and nationwide availability, making it our overall choice for best SBA lender.
Offers a broad array of business loan types
Available to businesses in all 50 states
Its commercial bankers are highly experienced in numerous industries
Has loaned more SBA 7(a) dollars than any other lender in 2020
Bauer Financial bank safety rating of 4 stars (“excellent”)
No physical branches
Only lends to businesses within its list of target industries/sectors
May not approve loans below $25,000
Every October, the SBA publishes a list of the 100 most active SBA 7(a) lenders for its fiscal year, which ends September 30. Ranked by dollar amount loaned, Live Oak Bank not only tops this year’s list at almost $1.5 billion in SBA 7(a) loans, but dwarfs the second-biggest lender’s $633 million.
By combining SBA 7(a) and 504 loans, providing a specialized team of bankers with deep knowledge in a number of industries, and making competitive-rate loans available to businesses in all 50 states, Live Oak takes our prize for best overall SBA lender.
Live Oak was founded in 2008 specifically as a commercial lending institution. It operates only one physical location in Wilmington, North Carolina. But its website and user interface are well-designed, and its team of commercial bankers is highly experienced in about two dozen industries.
Live Oak offers financing solutions to buy a business or franchise, build or remodel physical space, or expand and scale your existing business. Maximum loans are as high as $15 million. It also offers high-yield business savings and CD accounts.
Best for Quick & Easy Process: Funding Circle
Funding Circle’s wide network of lenders makes them a great choice when you want to move from overwhelmed to feeling on track for a business loan.
One brief online application connects you to a large network of business loan opportunities
Decisions can be delivered in as little as 24 hours
SBA loans are just one of six types of business financing vehicles offered
Includes loans with fixed interest rates and fixed monthly payments
Its top-notch website is full of useful resources and clear information
Loan amounts max out at $500,000
In-person offices only exist in San Francisco and Denver
Not available to Nevada businesses
Funding Circle enables you to complete one online application in six minutes to be paired with one or more business lenders, making it our top pick for a quick and easy process.
You’ll hear back from them within one business day with financing options that fit your needs and qualifications. In addition to SBA loans, it also offers non-SBA term loans, cash advances, lines of credit, and invoice factoring from its network of investor lenders, giving you access to more options than if you applied solely for an SBA loan. Though processing times vary by product, Funding Circle indicates that most successful applicants have their financing approved within five business days.
Funding Circle will not work, however, for those seeking fairly large loans (their maximum loan amount is $500,000) or for those wanting to borrow less than $25,000. It is also unavailable to businesses in Nevada.
Best for Small Loans: United Midwest Savings Bank
With its specialized SBA program for loans of up to $150,000 and its nationwide coverage, United Midwest Savings Bank is our top choice for smaller SBA loans.
Operates a program specifically focused on SBA loans of $150,000 or less
Available to businesses in all 50 states
Application can be completed easily and securely online
Bauer Financial bank safety rating of 5 stars (“superior”)
Your application is for a single loan and program
SBA loan amounts above $150,000 aren’t available unless you move to their combined SBA/USDA loan product
Offers branches only in Ohio
Originally established in 1889, United Midwest Savings Bank ranks eighth in the SBA’s list of most active lenders with 784 approved loans in FY2020. Its design of a specific program focused on loans below $150,000 earns it our top spot for the best lender of small SBA loans.
All SBA loan applications at the bank begin online unless you want more than $150,000, in which case you need to go through the combined SBA/USDA loan program. It serves businesses in every state and territory.
United Midwest leverages its nimble size and specialized focus to enable quick loan decisions and an efficient closing process, with a secure portal for transferring your application and required documents. As a result, it takes 45 days to close most loans.
United Midwest focuses primarily on the industries of medical, dental, optometry, and veterinary practices; hospitality businesses; funeral homes; and insurance agencies. But it also has a general category in which it can consider applicants from other industries.
Best for Large Loans: Bank of the West
With SBA 7(a) loans offered up to $5 million and an SBA 504 loan option for amounts as high as $15 million, Bank of the West takes the honors for best SBA lender for large loan amounts.
Maximum loan amount exceeds what most other SBA lenders offer
Interest rates that are among the lowest offered by SBA lenders
Branches in 21 states
Bauer Financial bank safety rating of 5 stars (“superior”)
No options available for loans below $50,000
Available mostly in states west of the Mississippi
No online application
Bank of the West provides the option for an SBA 504 loan of up to $15 million, which is among the highest in the industry. That makes it ideal for large real estate, construction, or equipment investments, and thus earns it our top ranking for the best SBA lender for large loans.
Founded in San Francisco in 1874, Bank of the West has since spread to serve most of the western United States. Its business lending has extended even further, offering east-of-the-Mississippi SBA loans in Florida, Illinois, Indiana, New York, and Wisconsin.
Even if you don’t need $15 million, Bank of the West can be a great choice if you’re shopping for the best rate. Among all of the SBA loans made nationwide in FY2020, Bank of the West’s average interest rate was the second-lowest.
Whether or not your business is in a state where the bank has a physical presence, you’ll need to contact a banker to start the process. It doesn't matter if you’re after a $50,000 SBA 7(a) loan or a $15 million 504 loan, there is no online application process.
Best for Real Estate: Byline Bank
Byline Bank’s rock-solid track record as the second most active SBA lender in the country and its array of three business loans that can be used for real estate make it our number-one pick for SBA real estate loans.
Offers SBA 7(a) and 504 loans, as well as SBA credit lines
Loan amounts up to $10 million
Long history as one of the most active SBA lenders nationwide
Business loans available in 40 states
Bauer Financial bank safety rating of 5 stars (“superior”)
Loans may not be available in Alaska, Arkansas, Delaware, Maryland, Montana, New Mexico, North Dakota, Nevada, Rhode Island, Wyoming, or Washington, D.C.
No online application
Physical branches only in the Chicago and Milwaukee areas
In the SBA program’s last fiscal year, Byline Bank extended almost 500 SBA 7(a) loans in 40 states, totaling $633 million. With its extensive SBA history and experience and its offering of multiple SBA and USDA business loans that can be used for large real estate purchases and construction projects, Byline is our winner for the best SBA lender for real estate loans.
Byline Bank has only operated under that name since 2015, but as North Community Bank, it has operated in Chicagoland since 1972. It has been Illinois’ top SBA lender for 11 years running, and Wisconsin’s for six years.
In addition to its Illinois and Wisconsin footprint, it has business banking individuals and teams stationed in California, Colorado, Florida, Indiana, Minnesota, Ohio, Tennessee, Texas, and Utah. Byline SBA loans can also be made in another 29 states, even if someone isn’t on the ground there.
Byline’s product line stands out for also including credit lines through the SBA CAPLines program, and USDA B&I loans for businesses located in rural communities. Additionally, several non-government business loans are only offered at Byline, from condo and townhome association loans to letters of credit to private working capital loans.
To get started, you’ll have to complete a brief contact form and talk directly with an online banker; there is no online process here.
Best for an In-Person Experience: JP Morgan Chase
As the nation’s largest bank with thousands of branches across the country, Chase earns the top spot for best SBA lender offering an in-person experience.
Offers physical branch locations in 38 states
Very large loans can be secured through their SBA 504 program
Unbeatable reputation as a safe, long-standing bank
Offers SBA Express loans
Unavailable in a dozen states
Chase’s prominence could mean you will compete with more applicants
No online loan process
Chase is the largest U.S. bank by assets and is a Top 15 SBA lender, closing almost 1,000 SBA 7(a) loans in the last fiscal year. But what lands it on our “best of” list is the ability for so many U.S. business owners to have an in-person SBA experience given the bank’s more than 5,200 branches spread out across 38 states and Washington, D.C.
Chase’s business lending department offers SBA 7(a) loans of up to $5 million and SBA 504 loans to a generous $12.5 million loan limit. In addition, Chase offers the option for SBA Express loans and lines of credit up to $350,000.
As a full-service bank, it also provides non-SBA business and commercial real estate loans, as well as robust business checking, savings, CDs, business credit cards, merchant services, and lines of credit.
Exploring SBA or other business lending with Chase requires talking with a banker; an online process is not available.
Best for Startups: Fundera
Given its built-in search tool for finding startup loans and its extensive online information on the various options to explore, Fundera earns our highest marks for an SBA lender focused on startup loans.
Completing one questionnaire on Fundera connects you to a variety of lenders
Provides a dedicated resource specifically on startup financing options
Access to Fundera’s network of recommended lenders is available nationwide and online
Must wait for a lending specialist to contact you with next steps
Many of the options may require your business to already be incorporated and for you to have invested your own funds
Your startup may be limited to the SBA’s microloan program
Fundera’s network connects borrowers to lenders not just for SBA loans but also for private business loans, business credit cards and lines of credit, and even personal loans, thus it tops our list for best startup lender.
Fundera does not make any loans itself. It is simply a marketplace for lenders and borrowers to come together with the convenience factor of filling out one application and being presented with various possibilities to consider. This is especially useful if an SBA loan turns out to be a non-option for your startup. Rather than receive merely a rejection on the SBA loan, Fundera presents you with other lending vehicles that your startup would qualify for.
Founded in 2013 and based in New York, Fundera’s primary focus is small businesses, not just small business lending. So in addition to business loans, lines of credit, and credit cards, it also links business owners to service providers for operational aspects such as point-of-sale systems, human resources, accounting, and legal services.
Best for Bad Credit: Fundbox
Fundbox’s straightforward approach to providing cash to your business without a hard credit pull earns it a mention for best business funding for those with bad credit.
Cash is extended as a revolving line of credit
Applying to Fundbox does not impact your credit score
The interest you’ll pay is clearly indicated upfront
Repayment can be done on a weekly auto-debit basis
Applying for and managing your line of credit is all handled online
The maximum line of credit is $150,000
Repayment terms are only three to six months long
Though reasonable, the interest rate is higher than on SBA loans
Applying businesses must have $100,000 or more in annual revenue to qualify
Fundbox’s business line of credit program could meet the needs of a business building credit, making it our best recommendation for small business funding for those with low credit scores.
The way it works is business owners apply online for a revolving line of credit, with Fundbox capping the highest limits at $150,000. You’ll have to demonstrate that you’ve been in business for at least six months and that you have an annualized revenue of at least $100,000.
Once approved, you can draw funds from your credit line and choose either a 12- or 24-week repayment period, with a higher interest rate charged on the longer option. Payments are auto-debited from your linked bank account on a weekly basis, and your credit limit replenishes with every amount of principal you repay.
The amount you’ll pay in interest with each payment, and in total, will be made clear to you at the time you’re requesting the funds, thus preventing surprises. There are no prepayment penalties.
Frequently Asked Questions (FAQs)
What Is an SBA Loan?
The SBA makes private lenders’ loans more affordable and attractive by guaranteeing a significant portion of the loan amount. Because the SBA’s guaranty substantially reduces the lenders’ risk of default, they are willing to make SBA loans with lower interest rates and fees, longer terms, more flexible qualification requirements, and/or lower down payment requirements.
SBA loans come in various flavors, but by far the most prominent is the basic 7(a) loan. It can be used as working capital; to acquire land; to purchase, construct, renovate, or expand buildings; to purchase supplies, inventory, or fixed assets; and even to start or purchase a new business.
Among the other common SBA offerings are smaller loans called microloans, and larger loans with longer terms called 504 loans, which are often targeted for investment in fixed assets and real estate.
What Is an SBA Preferred Lender?
To offer SBA loans, a financial institution or organization must become certified as an approved SBA lender. But there is another tier of lender status within the SBA program, and it has a big impact on the borrower.
Some institutions are elevated to the Preferred Lender Program (PLP). These lenders have a successful track record of processing and servicing a large number of SBA loans and have demonstrated their solid understanding of effective SBA loan underwriting. Consequently, they are granted the status of Preferred Lenders, which allows them to do their own loan approvals in-house and get a streamlined approval from the SBA to finalize the loan.
In contrast, standard SBA lenders must send their applications to the SBA for underwriting and approval taking as much as a month to review. Since most business owners are anxious to have their loans approved and funded as quickly as possible, choosing a Preferred Lender will deliver the fastest turnaround.
Who Should Get an SBA Loan?
Businesses that meet eligibility requirements that need funding should apply for an SBA loan. Eligible businesses must be incorporated as a for-profit enterprise, do business (or plan to do business) in the U.S. or its territories, demonstrate that there is reasonable owner equity to invest in the business, and show that other funding sources have been used or attempted before seeking SBA funding.
On the flip side, some business owners should not waste their time even exploring SBA loan options. If you have bad credit, have defaulted on a government loan in the past (including a government-backed student loan), or have a criminal record, you are highly unlikely to be approved for an SBA loan of any type. Additionally, some business types are ineligible, such as those involved in gambling, illegal activities, and pyramid schemes, as well as real estate investment firms, religious organizations, and nonprofits.
How We Chose the Best SBA Lenders
We began our research by looking at the past year’s most active SBA 7(a) lenders, filtering the list to about the top three dozen by both largest amount loaned and highest number of SBA loans processed.
We then filtered by Preferred Lender status, so as to avoid leading readers to any SBA lenders whose process would require an extra month in the timeline for SBA loan approval.
Next, we researched the geographic range of the remaining lenders, opting for those providing nationwide loans or, alternatively, covering as many states as possible. Some analysis was then conducted to compare program features, loan limits, number of available financing choices, the steps involved, and (via the SBA’s annual lender activity report) what the average interest rates were from the lenders last year.
U.S. Small Business Administration. "100 most active SBA 7(a) lenders." Accessed December 30, 2020.
Board of Governors of the Federal Reserve System. "Insured U.S.-Chartered Commercial Banks That Have Consolidated Assets of $300 Million or More, Ranked by Consolidated Assets." Accessed December 30, 2020.