6 Best Banks for Business Loans in 2024

One of the downsides of taking on venture capital or angel investment is tentatively losing equity in your company. For smaller capital needs, business loans are a non-dilutive alternative to taking on standard funding rounds — allowing you to extend your runway while keeping ownership of your company. 

Comparatively, business loans involve borrowing from a vendor and then repaying the loan over a period of time with interest. You will most often receive your loan in a lump sum or as a business line of credit, depending on the terms of your loan and the vendor you borrow from. 

Before you start applying for business loans, it is important to consider the different banks and the loans they have to offer to ensure that you are choosing the best vendor for your business. These are the best banks for startup business loans.

1. Mercury – Best for High-Growth Startups
2. Bank of America – Best for Small Businesses
3. U.S. Bank – Best for Early-Stage Startups
4. Chase Bank – Best for Business Lines of Credit
5. Capital One – Best for Business Credit Cards
6. Huntington Bank – Best for SBA Loans

For startups that have raised venture capital within the past year, Mercury offers venture debt financing to startups based on the strength of their investors, your founding members, and the scalability of your company. 

Mercury is a fintech that is partnered with FDIC-insured banks, not a bank itself. The company primarily backs companies incorporated in the United States that have either raised venture capital in the past year or plan to raise it in the near future. They deploy funding in a wide range of industries and startup stages.  

Types of Loans Offered

• Venture Debt

General Eligibility Requirements

• Applicants must have raised venture capital within the past year 
• Or, plan to raise venture capital in the near future
• Startups must be incorporated in the United States

Bank of America is a great choice for small businesses looking for a variety of loan options to choose from. With three Business Advantage loans offered, as well as several other business financing options, Bank of America has an extensive list of options available to small businesses looking for funding or to build business credit. 

There are two types of financing options available: loans and lines of credit. Business lines of credit provide companies with the opportunity to build their business credit score, making it ideal for startups with bad credit. 

Overall, the loans offered by Bank of America are robust in their selection and include helpful finance features such as free business credit scores, small business resources, and interest rate discounts if you are a Preferred Rewards for Business Member. 

Types of Loans Offered

• Business Advantage Credit Line: Unsecured line of credit with no collateral
• Business Advantage Credit Line Cash Secured: Line of credit with a security deposit
• Business Advantage Term Loan: Unsecured term loan with no collateral 
• Commercial Real Estate Loans 
• Equipment Loans 
• Healthcare Practice Loans 
• Small Business Administration (SBA) Loans 

General Eligibility Requirements

• Minimum two years in business 
• Minimum $100,000 in the prior year's annual gross sales

U.S. Bank is another great option for small business loans. With locations in 25 states across the US, borrowers can often find a branch in their area or apply for loans online. 

The bank will work with borrowers to determine the right business loan to fill cash flow gaps and cover unexpected expenses. Businesses that take out loans with U.S. Bank receive a one-time payout of funds as well as a fixed monthly payment. 

Maximum amount that can be borrowed ranges from $250,000 to $12.375 million, depending on the loan. U.S. Bank’s two standard business loans, the U.S. Bank Quick Loan and Business Term Loan, both have fixed interest rates. 

Types of Loans Offered

• U.S. Bank Quick Loan 
• Business Term Loan 
• Commercial Real Estate Loan 
• Small Business Administration (SBA) Loan 
• Equipment Financing Loan 
• SBA Paycheck Protection (PPP) 

General Eligibility Requirements

• Not listed

Chase Bank offers select loans and financing options for small businesses. In order to get a small business loan from Chase Bank, you will need to go into a local branch, as they do not offer loan application services online. 

Loans through Chase Bank start as low as $5,000. Payment terms for their standard small business loans extend up to seven years, while commercial real estate financing terms can last up to 25 years. 

Types of Loans Offered

• Business Terms Loans 
• Draw Loans 
• Business Lines of Credit
• Commercial Real Estate Loans

General Eligibility Requirements

• Not listed

Capital One doesn’t offer as many loan options as some competitors, however, their top business loan is a real estate term, making it a great choice for commercial real estate companies. 

The other primary offering is business lines of credit, which can be a great choice for businesses looking to build and improve their business credit score. Both Capital One’s real estate loans and business lines of credit are offered up to $5 million. 

Types of Loans Offered

• Real Estate Term Loans 
• Business Lines of Credit 
• Small Business Administration (SBA) Loans 
• Medical Practice Loans 
• Equipment Loans 

General Eligibility Requirements

• Time in business must be two years minimum 
• You must have a business checking account

Huntington Bank offers business loans and financing geared toward small businesses, real estate, and dental and veterinary practices. With only twelve states served, this bank is ideal for small businesses located in Colorado, Florida, Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Tennessee, West Virginia, or Wisconsin. 

Loan amounts range from $1,000 to $5 million, depending on the loan type. 

Huntington Bank’s term loans for business or real estate involve a fixed or variable rate, depending on the use of funds and collateral.  You can apply for Huntington Bank business financing by phone, online, or at a local branch.

Types of Loans Offered

• Business term loans 
• Real estate term loans 
• Business lines of credit 
• Small Business Administration (SBA) loans 
• Dental Practice Loans 
• Vet Practice Loans 

General Eligibility Requirements

• Not listed

While the banks and fintech companies above offer great options for startup and small business loans, there are still a myriad of additional lenders you may want to consider before deciding on the best bank for your startup business loan. 

Wells Fargo offers business loans, business lines of credit, and SBA loans. Information on the types of loans offered by Wells Fargo is limited on their website. However, you can easily browse their lending options using their Small Business Product Selector. 

Live Oak Bank business loans start at $150,000. The bank boasts a personalized experience to obtain a business loan to ensure your startup needs are met. Live Oak Bank offers commercial loans, SBA loans, and US Department of Agriculture (USDA) loans. 

PNC Bank offers term loans for businesses, including an unsecured business loan, secured small business loan, small business commercial real estate loan, and secured vehicle finance loan. The amount that can be borrowed varies depending on the loan, however, PNC Bank offers services to help you determine the right loan for your business. 

To get a startup business loan, you first need to determine the amount of capital you need to borrow and how it will be used. Then, decide on the bank or other lender you want to borrow from. 

In order to qualify for a business loan, you need to meet the eligibility requirements for the loan/lender, such as annual revenue or time in business minimums, have a tax ID for a credit check, and open or have a business checking account. 

Once you apply for your business loan and are approved, you will need to establish repayment terms and interest rates, as well as ensure you complete payments on time to avoid interest and fees.

While securing a business loan from a bank is a great way to fill cash flow gaps and get much-needed capital for your business, there are some alternatives that may be a better option for your startup. 

Loan marketplaces like Lendio and Uplyft Capital make it easy to shop and apply for business loans from a variety of vendors – all on one platform. Plus, with many loan marketplaces, you are able to upload only one application for a variety of loans and vendors, saving you time and energy.  

Revenue-based financing or royalty-based financing is capital in exchange for a percentage of future revenue. Companies like Capchase offer revenue-based financing options for startups with flexible payment terms that generate quick capital for your business. 

If you’re only looking for a small amount of capital, consider The Microloan Program from the SBA. These small loans have a maximum of $50,000, making them perfect for smaller capital needs. The average loan amount of SBA microloans is $13,000. 

Crowdfunding involves raising funds from several sources, sometimes in exchange for products or, less commonly, equity. Crowdfunding is a great way to gain support from early adopters while generating additional capital to refine and develop your product or service in the final stages. 

Another great option to increase your startup’s access to liquid cash is business credit cards. Plus, this option also allows you to build business credit and benefit from credit card perks such as travel benefits, cash back, and discounts on business expenses.