Do all banks offer small business loans?

Whether you want to purchase new equipment, expand to a new location or buy additional inventory, you may someday need a bank loan for business. But do all banks offer small business loans?

The short answer is that most banks include business loans among their products. Exceptions include investment banks like Goldman Sachs and especially small banks and credit unions. That said, approval rates differ between types of institutions. Bigger banks often have stricter lending policies that make approval more difficult.

With thousands of options, how do you choose the right bank? Your choices range from large national banks like Bank of America; to tiny, local banks like Oakwood Bank of Texas, possibly the smallest bank in the country, to credit unions like Suncoast Credit Union. And some banks even operate entirely online.

Key takeaways

  • Not all banks offer small business loans, but a majority do

  • Big banks may have longer application wait times and stricter requirements

  • Getting a small business loan through a small bank, credit union or online lender is often easier

Banks vs. other lenders

Whether applying for a business loan from a bank, credit union or online lender, as a small business, you need to determine the type of loan you want, such as commercial real estate, equipment financing or line of credit. Not all banks offer all kinds of business loans.

You also want to review the lender’s requirements. They may evaluate things like your business’s annual revenue, business plan and your credit score.

Banks often set stricter requirements than online and alternative lenders. Often, they require at least two years in business; many online lenders want between six months and a year. They may also require a higher personal credit score and even a well-established one business credit score.

According to the 2022 Small Business Credit Survey, small businesses who applied for loans from big banks reported experiencing more challenges with the application process and waiting times for a decision and funding than people who sought funds from small banks, online lenders and finance companies.

On the other hand, people who applied with online lenders said they had more challenges related to interest rates and unfavorable repayment terms than people who applied with banks and other lenders.

Despite the challenges, having a business banking relationship with a bank can help build trust and improve your chances of approval.

Approval rates

The 2022 Small Business Credit Survey also details the approval rates of loans, lines of credit and cash advance applicants. Keep in mind that the following numbers may represent customers who were approved for some funding but not the full amount they were seeking. Compared to 2021, 2022 approvals were up as the economy began to recover from the pandemic.

2021 approval rate

2022 approval rate

Small banks



Online lenders



Big banks



Finance companies



Source: Fed Small Business

Business loans from big banks

When considering a bank for a business loan, some people automatically think of large national banks like Bank of America, PNC Bank, TD BankUS Bank or Wells Fargo.

Small business loans, lines of credit and cash advance approvals were up from 49 percent to 68 percent from 2021 to 2022, according to the 2022 Small Business Survey. While this is a steep increase, it’s worth noting that approvals were at 61 percent in 2020.

Although these banks often have strict qualification requirements, they also tend to offer large amounts, low rates and long standing expertise in handling business loans.

Business loans from small banks

While the big banks mentioned above are well known, thousands of smaller banks — local, regional or community banks — exist throughout the country.

Small banks also saw an increase in loan approvals year over year from 2021 to 2002. While only 68 percent of applicants were at least partially approved in 2021, 82 percent of small bank applicants had success the next year. Back in 2022, 76 percent of small businesses were approved.

Smaller banks may lack the financial resources of the Big Five, but they may be more willing to work with fellow local businesses — especially if you have a prior banking relationship.

Business loans from credit unions

Small business owners should not overlook the options provided by credit unions. There are 4,712 credit unions in the country as of March 2023, with many offering small business loans.

The 2022 Small Business Credit Survey found 65 percent of small businesses said they were at least partially approved by credit unions. While there is no data for 2021 regarding approvals when it comes to credit unions (the survey’s methodology was amended in 2022), more small businesses are beginning to utilize credit unions. Between 2019 and 2021, 7 percent of small businesses sought funding from credit unions. In 2022, that figure rose slightly to 8%.

You may need to be a member to land a loan from a credit union. But, because credit unions operate as non-profits, you may find better rates and lower fees with them than at many other lending institutions.


Bankrate insight

People who qualify as low income or are part of an underserved community may want to explore community development financial institutions (CDFI). The US Department of Treasury oversees these banks and their loans.

The bottom line

Not all banks offer small business loans, but between large national banks, small local/regional banks and credit unions — both physical and online — there are thousands of options.

The key is to compare options and evaluate each institution’s lending requirements. For example, if you have bad credit, going to an alternative online lender may increase your chances of approval.

The best way to secure financing is to start looking wherever you do your banking business as your existing relationship can increase your chances of getting a loan. Then, compare terms, interest rates and fees among several other banks. Put together the requested documents and apply to see what each lender will offer you.

Frequently asked questions

  • What do most banks require for a business loan?

    Banks have different requirements for lending, but you’ll typically need to provide bank statements, income statements, business license information and other revenue documents and business information.

  • What’s the best place to get a business loan from?

    Your best chance of approval for a small business loan depends on several factors, including your credit and annual revenue. Most applicants with low-risk credit profiles are approved at a small bank. If you don’t have great credit or are just starting out, an online lender will likely be your best option.

  • Can I get a business loan through my bank?

    If you already have a relationship with a bank, you may want to apply for a loan there. The institution will already have access to some of your financial information, and you may have a better chance of approval. Small banks, large banks and credit unions typically offer various loan products for businesses.

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