1West research notes
Small business lending by the numbers
Last updated: November 2026
Why do small businesses borrow, and how often do they get approved?
Small businesses borrow most often to meet operating expenses, and small banks report the highest full approval rate at 57%, according to published 2026 lending statistics.
1West collected the published figures below because they explain why comparing funding options matters. Every number is attributed to the source that published it; none of them are 1West results. The Federal Reserve Small Business Credit Survey also notes that firms were more likely to report revenues decreased rather than increased in the prior 12 months.
Statistics
56%
of small businesses borrow to meet operating expenses, the top reason; 46% borrow to pursue expansion or new opportunities.
Source: Fora Financial, Small Business Lending Statistics and Trends for 2026
57%
full approval rate at small banks, the highest of any lender type.
Source: Fora Financial, Small Business Lending Statistics and Trends for 2026
17% to 29%
growth in the share of applications going to online fintech lenders, from 2020 to 2025.
Source: Fora Financial, Small Business Lending Statistics and Trends for 2026
36.2 million
small businesses operate in the United States, employing 62.3 million people and generating 43.5% of GDP.
Source: Fora Financial, Small Business Lending Statistics and Trends for 2026
$50,000
or less: the size of SBA microloans, which help businesses and certain nonprofit childcare centers.
Source: U.S. Small Business Administration, SBA lender resources
50% and 10%
In the SBA 504 structure, a private lender senior lien covers up to 50% of project cost, and the borrower contributes at least 10% equity.
Source: U.S. Small Business Administration, SBA lender resources
3% to 60%+
range of business loan rates depending on lender and loan type, with an average around 7.38%.
Source: Best Small Business Loans of 2026 (market roundup)
Operating expenses, not expansion, are the most common reason small businesses borrow.
What these numbers mean for your application
If most borrowing is about operating costs, working capital and lines of credit deserve a close look first. If approval rates vary by lender type, applying to more than one source raises your odds of finding a fit. And because rates span such a wide range, comparing total repayment is the single most useful habit. Read about unsecured working capital or return to the small business funding options overview.
Questions about the numbers
- What are typical interest rates on a business loan?
- Business loan rates vary widely by lender, product, and borrower. One 2026 roundup of small business loans reports rates ranging from 3% to 60% or higher. On the 1West website, listed starting rates are as low as 5% for receivables, 6% for real estate, and 7% for equipment financing. These are not quotes.
- What are the funding options for a small business?
- The main funding options for a small business are working capital loans, lines of credit, equipment financing, SBA loans, accounts receivable financing, and commercial real estate loans. Others include grants, microloans, and investors. Through 1West you can compare the six financing types listed first with one application, then pick the one that fits your purpose and cash flow.
- What alternative business financing options are there?
- Alternative business financing options include online lenders, receivables financing, equipment financing, microloans from nonprofit organizations, community development financial institutions, and grants. According to a 2026 lending statistics summary from Fora Financial, the share of applications to online fintech lenders grew from 17% in 2020 to 29% in 2025.
- What is an SBA microloan?
- An SBA microloan is a small loan of $50,000 or less, according to SBA.gov, designed to help businesses and certain nonprofit childcare centers. Microloans are typically made through nonprofit intermediaries and can suit newer businesses that do not yet meet bank or 1West requirements.
- How much do I need to put down on an SBA 504 loan?
- SBA.gov describes the 504 structure as including a contribution from the borrower of at least 10% equity of the total project cost, alongside a private sector lender loan with a senior lien covering up to 50% of the project cost. Your exact contribution depends on the project and lender.
- What is the 1West Small Business Health Index?
- The 1West Small Business Health Index is a quarterly report published by 1West. The Q3 2026 edition gives a score of 65.2 out of 100 and says the Confidence Gap is still open, with applicants cooling too. You can read it on the 1West website.
Put the numbers to work
Compare several matched offers with one ABLE application.
Eligibility and final terms depend on the financing product and lender. No approval, rate, or timing is guaranteed.