The Best Loan Options for Small Businesses in the Current Economy

Securing the right financing is a challenge many small businesses face, especially in an economy marked by rising costs, shifting consumer demand, and evolving lending standards. Further, with banks tightening requirements and interest rates fluctuating, entrepreneurs need to weigh their options carefully to find funding that aligns with their needs.

Hence, this article explores the best loan options available today and how they fit into the current financial landscape.

Best Loan Options for Small Businesses Today

Online and Alternative Lenders

For small businesses that struggle to meet the strict requirements of traditional banks, online and alternative lenders provide a faster, more flexible way to access funding. These lenders operate through digital platforms, streamlining the application process and offering quicker approvals—sometimes within hours.

One advantage of online lenders is their willingness to work with businesses with limited credit history or fluctuating revenue. They offer a range of financing options, including short-term loans, merchant cash advances, and lines of credit. A popular option among early-stage ventures is a business credit line for startups, which provides access to working capital as needed without the lengthy approval processes of traditional institutions. However, the convenience often comes at a cost. Interest rates tend to be higher than traditional bank loans, and repayment terms can be more aggressive.

Some alternative lenders specialize in specific industries or funding types, and you can find these through platforms that help businesses find financing tailored to their needs. For instance, if you are looking for lending companies, Credit Suite’s comprehensive list can connect you with small business loans lenders, including the ones offering revenue-based lending.

Nevertheless, compare terms, fees, and repayment structures before choosing an alternative lender.

Traditional Bank Loans

Banks typically offer two main types of business financing: term loans and lines of credit. A term loan provides a lump sum of money repaid over a fixed period with interest. It is ideal for businesses making large investments, such as purchasing equipment or expanding operations. On the other hand, a business line of credit allows you to borrow up to a specified limit and repay what you use, similar to a credit card. It can help with managing cash flow and covering short-term expenses.

While these loans offer stability and credibility, securing them is challenging. Banks have strict eligibility requirements, often demanding strong credit scores, detailed business plans, and collateral to secure the loan. The approval process can be lengthy, sometimes taking weeks or even months. It can be a challenge for businesses needing immediate funding. However, traditional bank loans offer some of the most competitive rates and repayment terms.

SBA Loans (Small Business Administration Loans)

The Small Business Administration (SBA) provides government-backed loan programs to help small businesses access affordable financing. Instead of lending directly, the SBA partners with banks and other financial institutions to offer loans with lower interest rates, smaller down payments, and longer repayment terms than conventional options.

Each SBA loan suits different business needs. For instance, the 7(a) loan program is the most common, providing funds for working capital, equipment, and real estate purchases. The 504 loan program focuses on fixed assets, such as buildings or machinery, and is ideal for businesses looking to expand. Microloans, which offer smaller amounts of up to $50,000, are available for startups or businesses that need lower capital investment.

While SBA loans are an excellent option for those who qualify, the detailed requirements can be a barrier for newer or less established businesses. However, these loans provide some of the most affordable and flexible financing options for those willing to navigate the process.

Grants and Crowdfunding Options

Grants and crowdfunding are alternatives without a repayment burden. They typically come from government agencies, nonprofit organizations, or private corporations to support businesses in specific industries, demographics, or initiatives.

While they do not require repayment, grants often come with strict eligibility criteria and a highly competitive application process. Businesses must demonstrate how they will use the funds and, in some cases, meet ongoing reporting requirements.

Crowdfunding presents another way for businesses to raise money, allowing entrepreneurs to pitch their ideas directly to the public. Supporters contribute funds in exchange for rewards, early access to products, or equity in the business. Crowdfunding can generate significant capital and build brand awareness, but success depends on strong marketing efforts.

Business Credit Cards

Business credit cards can be a practical financing tool for small businesses needing quick access to funds. They are best suited for short-term expenses, such as purchasing inventory, covering operational costs, or managing cash flow gaps. Many business credit cards come with rewards programs, offering cashback, travel points, or discounts on business-related expenses.

However, their convenience comes with risks. High interest rates can quickly lead to debt accumulation if balances are not paid in full each month. Additionally, excessive reliance on credit cards can strain business finances, especially if revenues fluctuate. Used wisely, they offer flexibility and financial cushion, but mismanagement can result in long-term financial challenges.

Invoice Financing & Factoring

Invoice financing allows businesses to borrow against unpaid invoices, using them as collateral. The business retains ownership of the invoices and repays the lender once customers pay. On the other hand, invoice factoring involves selling unpaid invoices to a third party at a discount in exchange for upfront cash.

These solutions benefit businesses that experience delayed customer payments but need immediate working capital. The biggest advantage is invoices are the only collateral. However, fees and interest rates can reduce profit margins, making it essential to weigh the cost of financing against the benefits of improved cash flow.

Equipment and Asset-Based Loans

Businesses needing to purchase machinery, vehicles, or other assets may turn to equipment and asset-based loans. The equipment or assets secure the loans, making them easier to obtain than unsecured loans. Lenders are more willing to approve these loans since the equipment acts as collateral, reducing risk.

The primary advantage is easier approval, even for businesses with limited credit history. Additionally, these loans typically have lower interest rates than unsecured financing. However, there is a risk of losing the asset if the business is unable to make payments.

Conclusion

Securing the right financing can make the difference between stability and struggle for a small business. For instance, traditional bank loans offer competitive rates but require strong financials, while SBA loans provide affordable terms for those who qualify.

In addition, online lenders and alternative financing options fill the gap, though often at higher costs for businesses that need fast access to funds. Exploring multiple sources, comparing terms, and planning for repayment are crucial steps in choosing the right funding solution.

This post may contain affiliate links. Financial Panther has partnered with AwardWallet and CardRatings for our coverage of credit card products. Financial Panther, AwardWallet, and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. The site does not include all card companies, or all available card offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

More Recommended Ebike/Scooters

Check out these other ebikes and scooters I've reviewed:

Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
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More Recommended Investing App Bonuses

For additional investing app bonuses, be sure to check out the ones below:

M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.

More Recommended Bank Account Bonuses

If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.

Upgrade ($200) – Upgrade is a free checking account that’s currently offering a $200 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $200 Referral Bonus – Step By Step Directions.
Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
US Bank Business ($900) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.

Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:

SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
US Bank Business. US Bank is currently offering new business customers a $900 signup bonus after opening a new account and meeting certain requirements.
M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.

Feel free to send Kevin a message here.