Find the best business loan rates (2021)

Average Small Business Loan Amount: Outlined and Defined

By Elise Moores Managing Editor at Fast Capital 360 Reviewed By Mike Lucas Updated on May 04, 2021

How do your funding needs compare with those of business owners throughout the U.S?

We’ve compiled every average small business loan amount by lender and loan type to help you gauge the amount of financing you might qualify for as a small business owner.

Average Business Loan Amount by Lender

There’s no one answer when you’re asking “What’s the average small business loan amount?” It varies by lender. But learning what lenders look for is a good starting point in deciding how to get a small business loan and what types might work best for you.

Specific lenders have different resources and goals for their loan programs. As such, your lender might decline your application simply because you’re asking for too much or too little.

Let’s take a look at the average loan amount for small business loans you could  find from banks and online lenders, including Fast Capital 360.

LenderAverage Loan Amounts 
Large National Banks $593,000
Small Domestic Banks $146,000
SBA Loans$107,000
Fast Capital 360 Lenders $31,000

Large National Banks: $593,000

Banks are considered the gold standard in business financing. They can offer some of the best rates, long repayment terms and high average business loan amounts. The average business loan amount issued by large banks was $593,000 in 2017 according to the Federal Reserve.

Large banks generally shy away from smaller commitments as lower principals accrue less interest. Banks are also risk-averse, preferring to work with large established corporations over smaller ones.

For this reason, they’re not the right fit for every business owner. If you’re looking for modest loan amounts or your credit profile doesn’t meet a bank’s strict requirements, you’ll need to look at other lenders.

A pair of arms and hands extend from a bank’s doors, offering a dollar sign to a businessman outside the building.

Small Domestic Banks: $146,000

Smaller banks (such as regional banks and credit unions) tend to have less money by nature. This makes it difficult for them to offer the multimillion-dollar loans that large national banks can and naturally makes their average small business loan amount less than that of large national banks.

To be precise, according to the Federal Reserve data, the average small business loan amount was $146,000—nearly $450,000 less than larger banks. The risk of debt charge off on larger loans is too significant for smaller, regional banks. In turn, these lending institutions are a good source for small business owners looking to fund less capital-intensive projects.

Despite the lower dollar amounts, qualification requirements for loans issued by regional banks and credit unions are strict. Business owners working to improve their financial profile may have to consider alternative routes to financing.

Lenders of SBA Loans: $107,000

The average business loan amount for all types of loans backed by the Small Business Administration (SBA) was $107,000 in 2017, according to Federal Reserve data.

While the SBA isn’t a lender, if your small business isn’t able to qualify for conventional bank funding, this government agency will guarantee a portion of your loan offered through a partner lender. This makes it less risky for lenders to approve borrowers.

Here is the average SBA loan amount that’s offered by each type of institution.

PPP Loans: Less than $95,000

When the COVID-19 pandemic hit the U.S. in full force in spring 2020, the SBA Paycheck Protection Program (PPP) provided financing so businesses could have working capital, including payroll. These loans aimed to help the U.S. weather the economic downturn as many businesses deemed “non-essential” had to temporarily close or scale back operations to slow the spread of COVID-19.

According to the SBA, the average PPP loan size was less than $95,000.

SBA Loans Issued by Large Banks: $59,000

You might wonder why the average SBA loan amount of $59,000 is sharply lower than the small business loan amount of $107,000 that’s typically offered by large banks. That’s because (in non-pandemic times)  larger banks generally focus on offering conventional bank loans.

Of the inventory of loans large banks provided in 2017, 0.1% of the value of all large bank loans were SBA loans, according to Federal Reserve data.

SBA Loans Issued by Small Banks: $165,000

Smaller banks don’t usually have the opportunity to take a risk on multimillion-dollar loans. With the government guaranteeing a portion of SBA loans, however, it lessens their risk and makes it worth offering more high-figure approvals, with typical small business loan amounts of $165,000.

Small banks also provide more than double the total value of SBA loans compared with large banks. If you’re looking for an SBA loan, start your search for a lender at a regional bank.

Alternative Lenders: $31,000

Alternative lenders look at your business’s overall financial health to assess your fundability.

This means they’re more likely to work with younger, smaller businesses.

As a result, the average small business loan amount offered through online alternative lenders is typically lower. In 2020, the average small business loan amount for all financing offered through Fast Capital 360’s partner lenders was $31,000.

Qualified borrowers with high annual revenues can still receive seven-figure loans, but the interest rates and repayment structure will be different from what large banks offer.

Do you need a loan for your small business?

Average Business Loan Amount by Alternative Funding Type

There are other options you can use to fund your small business besides banks and other lenders.

The following are alternatives to term loans and are offered by many online lenders. These funding types may not share the same low interest rates offered by banks or the SBA, but they have flexible terms and are options for businesses with bad credit.

LoanAverage Funding Amounts 
Business Line of Credit$22,000
Merchant Cash Advance $32,000
Equipment Financing 100% of equipment value 
Invoice Financing80% of accounts receivable value 

Business Line of Credit: $22,000

Instead of a one-time lump sum, a business line of credit gives you access to a revolving amount of funding to provide the cash flow you need to run your business.

With a business line of credit, you withdraw and use funding as needed. You pay back what you borrow, and then take out additional funds when you need them.

Banks do offer higher lines of credit to qualified borrowers, but online lenders approve businesses unable to qualify for those high limits, albeit at a considerably lower amount. The average business loan amount for a line of credit offered by non-bank lenders is $22,000.

Merchant Cash Advance: $32,000

Although not a loan, merchant cash advances (MCAs) are a popular choice among businesses with a limited credit history or a bad credit score.

MCA providers advance you working capital that’s repaid with a percentage of your future sales. Payments are taken out from credit card transactions or ACH draws until you’ve paid in full.

These are great short-term funding options if you’re looking for an infusion of working capital. The average MCA amount offered through Fast Capital 360’s lending partners was $32,000 in 2019.

Crane with wrecking ball breaks a piggy bank and a dollar sign flies out.

Equipment Financing: Up to 100% of Value

If you’re in the market for new equipment, it isn’t the average small business loan amount but the maximum business loan amount you should consider. Instead of basing the total amount off of what you’re qualified to receive, equipment financing considers your fundability alongside the value of what you want to purchase.

For example, a qualified borrower applying for $50,000 in commercial truck financing would likely be given a loan for the full $50,000.

Depending on the equipment’s longevity, however, you could be required to submit a down payment. Check with your lender during the application process to learn what you could be on the hook for up front.

Invoice Financing: Up to 80% of Receivables

With accounts receivable (or invoice financing), lenders typically give you up to 80% of the outstanding invoices you wish to finance. The amount of funding you get correlates with the value of what’s already owed to you.

Think about it like getting an advance when you need working capital and don’t have time to wait for your customers to pay up.

Applying for Your Small Business Loan

Now that you have an idea of various average small business loan amounts, it’s time to assess your own situation.

If you’re applying for a long-term bank or SBA loan, you’ll need to draft a loan request letter detailing how much you need, why you need it and other information to prove your fundability.

If you think an alternative loan would be a better fit for your small business, one of our expert Business Advisors will guide you through how the process works and match you with a top lender.

If you’re wondering how different rates and repayment terms are affected by your potential business loan amount, our small business loan calculators can help you get a better idea of what’s in store for you as you apply. And if you need to borrow more than the average small business loan amount, see what options are available to fully fund your business’s success.

Average small business loan amount infographic

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