There are various online business loan options available today. Some lenders include large commercial banks with stringent requirements for borrowers while other direct online lenders often impose more lax requirements for their borrowers.
Some business loan types are unsecured while others require collateral such as real estate or inventory as security for the loan. Furthermore, lenders often establish financial covenants to be adhered to during the life of a loan agreement. Apply for a small business loan online if you can satisfy a lender’s qualifications and make the monthly payments.
- Consider Your Needs
Selecting the optimal loan product depends on your business’s financing requirements. In general, to be approved for conventional lenders such as banks and credit unions, adequate collateral, good credit history and revenue must all exist in your company. Without meeting these criteria, financing might prove more challenging.
Consider your loan options carefully when comparing terms and payments; monthly, weekly or even daily installments could be required of you depending on which lender offers the loan. In addition, lenders will likely assess your debt-to-income ratio to ascertain if they can grant you financing or not.
Some lenders require a down payment or collateral, such as real estate, accounts receivable, inventory or equipment as security for loans. Other lenders have no collateral requirements and will rely instead on your personal credit score and business financial statements when deciding if you can handle debt repayment. It is also wise to monitor your credit report regularly and correct any errors as soon as possible in order to reduce surprise when applying for an online small business loan.
- Review Lender Requirements
Understanding all your financing options as a small business owner is vitally important, so you can assess each lender’s individual guidelines and requirements to select one best suited to your company.
For instance, if you need financing to hire new employees or purchase equipment, working capital loans from online lenders like Bluevine, Credibly and Fundbox offer quick turnaround times and relatively lenient eligibility requirements (such as annual revenue requirements). Or perhaps an SBA microloan might better suit your needs; offering long repayment terms but demanding more stringent financial statements, tax filings and assets on the balance sheet.
Traditional banks also provide business loans, but their application processes and stringent criteria may make the loan application process time consuming and uncertain. When this is the case for small businesses looking for financing quickly and with more flexible terms for those with credit score challenges. It might be worthwhile considering alternative lenders and lending marketplaces which provide financing more quickly and offer flexible terms than banks might.
- Compare Fees
As part of your research on online business loans, it is crucial that you consider what fees the lender charges you for access to your funds. Some providers charge flat rates while others may impose percentage-based charges – these costs can add up over time and make financing less appealing than initially imagined.
Alternative lenders tend to have easier application processes and offer flexible terms that meet your individual needs, unlike traditional banks that tend to require extensive paperwork and processing time for each application.
Quickbridge provides an online business loan with an easy application process and instant approval, without requiring you to have perfect credit score or industry-specific funding options for trucking, pawnshops and retail businesses. Kabbage, which specializes in technology loans, also provides quick approval processes with no credit score requirement as well as industry-specific funding solutions for all sizes of businesses ranging from trucking, pawnshops and retail businesses.
- Choose the Right Lender
When it comes to online business loans, there are multiple financing options available to you. To select one that best meets the needs of your company, compare key elements like repayment terms, fees, and APRs before deciding.
Consider whether or not a lender requires personal or business collateral as this could cover the cost of the loan if you cannot repay. Some lenders provide lines of credit without collateral requirements – Credibly and Bluevine are popular options for small business loans while Fundbox offers fast turnaround with more lenient eligibility requirements for working capital loans.
Traditional banks tend to provide the types of online business loans you are most familiar with, such as term loans and lines of credit. Unfortunately, their approval processes and funding criteria can often take too long and be restrictive; alternative business lenders typically require less paperwork; merchant cash advance providers offer high factor rates but don’t take a percentage of your monthly sales as repayment; there may also be financing solutions offered through local credit unions that may work better for your needs.
