Best Low-Interest Business Loans in December 2025
Compare top lenders to find the best low-interest loan for your business.
| Lender | Best for | Starting rate | Amount | Term | |
|---|---|---|---|---|---|
|
Startups | 4.66% (suffix) |
$1k – $1.5M |
Not specified | |
|
Fast funding | 22.45% (suffix) |
$25k – $500k |
6 to 60 months |
Low-interest lenders at a glance
Fundbox’s Logo
4.66% Starting rate (suffix)
$1k to $1.5M Amount
3 months Time in business
Not specified Term
600 Min. credit score
Best for: Startups – Fundbox
- Relatively low credit score, time in business and annual revenue requirements
- Revolving funds let you to borrow money as needed
- Helps build business credit
- Short repayment terms increase the cost per payment
- Weekly payments required
With relatively low credit score, time in business and annual revenue requirements, Fundbox is our top option for startup companies. The online lender offers lines of credit up to $1,500,000 with affordable starting rates, though the exact rate you pay will depend on the repayment terms.
Each time they withdraw funds, Fundbox borrowers are asked to choose a payment plan, repaying their funds over Not specified or Not specified. For Not specified terms, interest rates start at 4.66%. For Not specified terms, rates start at Not specified.
Unlike many of the lenders on this list, Fundbox requires weekly loan payments. However, these payments will be automatically debited from your business checking account, ensuring that you never miss a payment. For startups, this may be particularly beneficial, making it easier for you to establish and build business credit.
iBusiness Funding’s Logo
22.45% Starting rate (suffix)
$25k to $500k Amount
24 months Time in business
6 to 60 months Term
640 Min. credit score
Best for: Fast funding – iBusiness Funding
- Relatively fast funding times
- No application fees or prepayment penalties
- No hard credit check required
- Collateral, personal guarantee and/or blanket lien may be required
iBusiness Funding is our pick for the best quick business loan with low interest rates. Online lenders that offer fast financing often charge a hefty price for the speed, but with iBusiness Funding, you may be able to get a loan for up to $500,000 in just a few business days without breaking your budget.
Interest rates start at Not specified, which is low compared to other online lenders. iBusiness Funding’s annual percentage rate (APR), which represents the total cost of borrowing including fees, can range from 22.45% to 15.75%.
However, it’s worth noting that not everyone will be able to qualify for this lender’s lowest rates. Like most lenders, the rate you qualify for will depend on your business and financial history.
What’s considered a low interest rate?
Based on data from the Federal Reserve, the average rate on a business term loan is 7.98%.
The exact rate you pay for business financing will depend on several factors, including your finances and the loan type, term length and amount.
However, the lender you choose will also affect your interest rate, with some lenders offering more affordable rates than others.
Pros and cons of low-interest business loans
The lenders that offer the lowest rates don’t always provide the same perks as higher-interest lenders, so small businesses will need to weigh their options carefully to make the best choice for their situation. Low-rate loans can:
PROS
- Keep monthly payments manageable
- Cost your business less over time
CONS
- Be harder for low credit and startup businesses to qualify for
- Take longer to fund
- Require collateral or a personal guarantee in some cases
How to qualify for a low-interest business loan
Getting a low-interest business loan takes some preparation, but it’s often worth the extra work. With a low rate, you could potentially save thousands of dollars on your financing costs, potentially leaving you more money to invest into your business.
If you’re planning ahead and don’t have an urgent need for financing, spend some time working on the following factors to improve your chances of loan approval.
- Personal credit score: For the best rates, many lenders require a credit score of 670 or higher. To raise your score quickly, focus on paying down existing debts. If you have more time, you can also use a credit card or cash-secured line of credit to build your credit history.
- Business credit score: Building business credit can make it easier to secure low rates. A business credit card can help in this endeavor, though because these cards have higher rates than other types of small business financing, you’ll want to pay off your balance in full at the end of every month to avoid increasing your debt.
- Time in business: While some lenders may be willing to work with new businesses, startup business loans are generally considered risky, which means they often have higher rates. For lower rates, consider waiting until you’ve been in business for at least two years to apply for financing.
- Annual revenue: As your business grows and generates more revenue, qualifying for a low-interest business loan gets that much easier. If you can afford to take some time for your business to grow, it may allow you to get a better deal on your financing.
Where to find low-interest business loans
There are many different types of lenders that offer business financing, but not all lenders are created equal. Let’s explore some of your low-interest options.
Banks and credit unions
Traditional lenders tend to offer the lowest interest rates on business loans, though these loans are often the hardest to qualify for. However, it may be easier to get approved for financing if you have an existing relationship with the bank or credit union.
SBA lenders
Loans backed by the U.S. Small Business Administration are offered through a network of banks, credit unions and alternative lenders. These loans can take longer to get, but they tend to offer more affordable rates and terms.
Nonprofits and local organizations
Although more rare, some nonprofit lenders offer low-interest business loans to minorities who may not qualify for favorable business financing offers from other lenders.
Note that while it may be faster and easier to qualify for a loan with an online lender, these loans typically come with higher rates than those offered by traditional lenders.
Low-interest alternatives to business loans
The best business loan rates are typically reserved for the most qualified of borrowers. If you don’t qualify for a low-interest business loan, you may have better luck with one of these other financing options:
- Crowdfunding: If you have a strong business concept, you may be able to raise funds with the help of friends, family and crowdfunding platforms such as Kickstarter or Fundable.
- Small business grants: Many federal, state and independent agencies offer business grants. However, these grants can be competitive and may be limited to businesses in certain industries. For example, the U.S. Environmental Protection Agency (EPA) offers grants for businesses in the green sector.
Though businesses that struggle to qualify for financing can also choose to fund their business through a personal loan or line of credit, it’s important to note that these forms of financing carry higher interest rates, so they may not be a good option if low rates are a top priority.
Frequently asked questions
Credit unions and banks generally offer the lowest rates on most types of financing. In contrast, online lenders typically charge the highest rates.
The median interest rate on a business loan was 7.98% during the second quarter of 2024, according to the latest Federal Reserve data. If you can find a business loan charging a lower rate, you can be confident it’s a good deal.
Businesses generally pay lower interest rates than individual people applying for personal loans. That’s because business loans are often secured with business assets, and a business must undergo extensive vetting with most financial institutions before being approved for a loan.
Our methodology: How we chose the best low-interest business loans
We reviewed more than 15 lenders to determine the best low-interest business loans on the market. To make our list, lenders must meet the following criteria:
- Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
- Repayment experience: We consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.