Small Business Loans
Average Small Business Loan Amount: Across Banks and Alternative Lenders
The average loan extended to U.S. businesses in 2018 was $663,000. However, depending on the type of loan and the lender, averages may range from $13,000 to $1.2 million. Below, we looked at some of the key factors that affect how much small business owners receive in funding.
Average Small Business Loan Amounts by Lender
The average business loan was $663,000 in 2018. This includes all industrial and commercial loans that businesses received throughout the United States. On average, national and foreign banks lent larger amounts to businesses than small national and regional banks. Among alternative lenders, the average loan amount is even less, ranging from $50,000 to $80,000.
Lender | Average Business Loan Amount |
|---|---|
| Large national banks | $593,000 |
| Small national or regional banks | $146,000 |
| Foreign banks (made by U.S. branches) | $8,512,000 |
| Alternative lenders | $50,000 - $80,000 |
Average Small Business Loan Amounts: Alternative Lenders
Alternative lenders have grown in popularity in recent years, as business owners who haven’t been traditionally served by banks can now go online for funding. Online lenders typically lend smaller amounts than a bank would, with average loans ranging from $5,000 to $200,000 among top online lenders. In the table below, we compare average loan amounts for 2018 across several alternative lenders.
Lender | Average Small Business Loan Amount |
|---|---|
| Fundbox (invoice factoring and line of credit) | $5,000 - $40,000 |
| BlueVine (line of credit) | $25,000 - $30,000 |
| OnDeck (term loan) | $40,000 |
| Credibly (term loan) | $53,000 - $56,000 |
| Balboa Capital (term loan) | $75,000 |
| QuarterSpot (term loan) | $90,000 |
| BlueVine (invoice factoring) | $100,000 - $200,000 |
| Funding Circle (term loan) | $150,000 - $200,000 |
Online lenders have filled a funding gap by offering lower loan amounts, faster processing times and relaxed eligibility criteria. While annual percentage rates (APRs) may be high, a loan from an online lender can be a convenient solution for small business owners who have struggled to get funding. That said, some alternative lenders even offer APRs more in line to those offered by banks, which makes them a competitive option for a wide range of small business owners. If you decide to get a loan from an alternative lender, you should do the same due diligence that you would with a bank loan—know the total cost and terms of the loan as well as any additional fees or penalties you could incur.
Average SBA Loan Amounts
In 2018, the average SBA 7(a) loan was $417,316 while the average SBA microloan was approximately $13,000. In the table below, we look at average size for all loans backed by the SBA at both large and regional banks. On average, small national and regional banks lent more through the SBA loan programs than large national banks.
Lender | Average Amount for Any Loan Backed By SBA |
|---|---|
| Large national banks | $59,000 |
| Small national or regional banks | $165,000 |
| All banks | $107,000 |
Throughout the year, the SBA tracks the top 100 7(a) lenders across the country. These rankings are based on the total lending volume and the number of loans made. In the table below, we look at the average loan amount for the top 20 SBA lenders for the 2018 fiscal year—up to September 2018. Average loan amounts range from $1.3 million at Live Oak Bank— which was also the second largest SBA lender—to $89,000 at TD Bank. Similar to the Federal Reserve findings, regional banks had higher average loan amounts than many of the national banks.
Rank | Bank | # of Loans | Total Loan Volume | Avg. 7(a) Loan Size |
|---|---|---|---|---|
| 2 | Live Oak Bank | 1,055 | $1,405,090,000 | $1,331,839 |
| 8 | Byline Bank | 360 | $397,925,100 | $1,105,348 |
| 18 | Commonwealth Business Bank | 199 | $209,578,800 | $1,053,160 |
| 19 | BankUnited | 201 | $208,246,300 | $1,036,051 |
| 13 | Seacoast Commerce Bank | 279 | $276,120,900 | $989,681 |
| 20 | Regions Bank | 261 | $205,817,000 | $788,571 |
| 7 | Newtek Small Business Finance | 525 | $405,370,300 | $772,134 |
| 16 | Bank of the West | 376 | $255,351,400 | $679,126 |
| 15 | Bank of Hope | 406 | $263,829,100 | $649,825 |
| 14 | SunTrust Bank | 412 | $267,264,700 | $648,701 |
| 9 | KeyBank | 739 | $318,065,200 | $430,399 |
| 6 | Celtic Bank | 1,417 | $487,483,800 | $344,025 |
Where You Should Look for Loans
If you’re a small business owner looking for a loan, consider a variety of funding sources since shopping around will help you get the best deal. For loans of $100,000 or more, bank and SBA loans are likely your best option—especially if you need $500,000 or more. Contact a bank or credit union that you've previously worked with since building a relationship there will mean better terms and rates later on. For SBA loans, you may also want to consider an online lender—such as SmartBiz or Guidant Financial—that can offer faster funding.
You should consider a loan from an alternative lender, a small local bank, or a nonprofit lender for loans under $100,000 since many larger banks may be reluctant to offer such small loans. While alternative lenders have higher APRs on average, you can still find reasonable terms if you have a good to excellent personal credit score—defined as any FICO score above 680. Alternative lenders—such as OnDeck, LendingClub, Fundation, Funding Circle and StreetShares—offer APRs starting under 10%. Finally, if you need $50,000 or less, you should consider applying for a microloan through the SBA or a nonprofit microfinance organization—like Kiva or Grameen America.