Whether you need a long-term loan, a line of credit or a business cash advance, $25,000 loans come in many flavors. While you don’t necessarily need great credit to qualify for this amount, you generally need to be in business for at least six months to a year with a minimum annual revenue between $50,000 and $100,000.
Compare providers to make sure you’re getting the most competitive rates and terms before you apply.
Most lenders offer $25,000 business loans, including banks, credit unions, alternative online lenders and marketplaces like Lendio. While established businesses might find more competitive rates at a large national bank, newer businesses might have better luck with an online lender or an SBA loan specialist.
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Business loans for $25,000 cover a wide range of funding needs. Here’s a list of the most common types.
| Type of financing | Description | Use |
|---|---|---|
| Short-term business loan | An unsecured lump sum loan with repayment terms of up to 18 months | To cover unexpected costs or to survive a downturn |
| Business term loan | An unsecured lump sum loan with repayment terms of up to 10 years | To provide working capital for more established businesses |
| Business line of credit | A revolving line of credit for ongoing expenses | To tap into funds as needed and pay off as you go |
| Merchant cash advance | A quick turnaround loan for newer businesses or those with bad credit | To borrow against your future credit card sales |
| SBA loan | A low interest small business loan partially backed by the government | To provide working capital to grow your business |
| Equipment financing | A collateralized term loan to fund equipment | To pay for any kind of equipment for your business |
| Inventory factoring | A loan with an amount tied to your receivables | To access cash by selling your purchase orders or receivables |
| Inventory financing | A loan with an amount tied to your receivables | To access cash with a loan backed by your invoices |
Business loans can either be secured or unsecured. Secured business loans may require some kind of collateral — especially if it’s an equipment loan. However, it’s possible to get an unsecured business loan of $25,000 from select online lenders.
While a $25,000 business loan is well below the average business borrowing amount of $660,000, it’s still substantial enough that you’ll need to meet certain revenue and other criteria, including:
The cost of a $25,000 business loan can vary widely depending on the type of loan. For example, a traditional bank term loan might start as low as 8% APR, while SBA loan rates are capped at the prime rate plus 2.25% to 2.75% for most programs, plus additional fees.
For shorter-term financing like lines of credit, APRs can run much higher — typically starting below 10% for the best credit borrowers and reaching as high as 60% APR or more for borrowers with lower credit scores.
Use the calculator below to find out how much your loan might cost based on different rates and terms.
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It depends on your loan. Most $25,000 loans are term loans, lines of credit, merchant cash advances (MCAs) and invoice factoring and financing. Because these loan types are so different, payments vary widely. They might be monthly for a term loan but weekly or even daily for an MCA. And if you use invoice factoring, you won’t repay the factoring company at all — rather, you sell your invoices to the company for a discount.
The application process depends on the lender. While traditional bank loans might require a lot of paperwork, some online lenders offer “no-doc” loans that connect to your accounts to verify your financials immediately.
Regardless of the lender, here are the general steps to apply for a $25,000 business loan:
The turnaround time on $25,000 loans depends on the loan type. SBA loans can take weeks to process, while short-term loans from online lenders can take one business day or less. For the fastest application times and turnaround, consider a no-doc lender.
Yes, many SBA loan programs are available for $25,000, including the popular 7(a) and Express loan programs. Loans backed by the Small Business Administration (SBA) offer low rates and high loan amounts to businesses that have a hard time qualifying elsewhere. But they also come with some of the highest rejection rates in the market.
It’s possible to find $25,000 in business financing, even with bad credit. But your options may be more limited. The most common types of business loans and financing available to bad credit borrowers are merchant cash advances, invoice factoring or financing, as well as loans backed by collateral, such as equipment loans and leases.
Yes, but your options are basically limited to SBA 7(a) and SBA microloans and possibly SBA 504 loans to finance equipment. However, SBA loans tend to have somewhat stringent requirements. You’ll need decent credit and a solid business plan showing how the business will generate revenue to qualify.
Because it can be hard to qualify for an SBA loan, some entrepreneurs use their own savings or take out a personal loan to finance a new business. Personal loans don’t have a time in business or revenue requirement, making them ideal for startups — if the lender allows the funds to be used for this purpose.
For more options, see our comprehensive guide to startup loans.
While it’s likely easier to qualify for a $25,000 loan than a larger amount, you’ll still need to meet the lender’s criteria. Compare the best small business loans to see the amounts and rates you may qualify for.
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