Now is the best time to get online business loans, because the subprime mortgage crisis swept our country ten years ago. The economic conditions have improved and the competition among the lenders has increased.
However, it does not mean that all the banks will gladly cooperate with entrepreneurs. You can try and, if you qualify, the interest rate can be low. But, like the other small business owners, you probably won’t get anything as those banks do have strict requirements.
Online lending is an alternative option as today many web-based lenders are willing to cooperate with the businessmen.
According to the Small Business Credit Survey, 32% of applicants turned to online lenders in 2018, up from 24% in 2017, and 19% in 2016.
*The growth occurred despite lower applicant satisfaction with online lenders compared to satisfaction levels with large and small banks.
And yes, one has more chances to get approved for one of the best small business loans offered on the web, but it is necessary to remember in that case the APR will be higher.
Compare the Best Small Business Loans
If you are in search of the best business loans, we offer a review of a few online lenders.
We will profile all of them and describe the criteria for choosing the top lender. We will also cover the basic information on financing options, including tips for getting approval. Keep on reading, compare business loans online and you will discover why these lenders stand out among others.
Top Peer-to-Peer Small Business Loan Lenders
LendingClub started using the “peer-to-peer” model in 2014. It connects a borrower with an investor, who is eager to become a funder. This lender gives low-interest loans to borrowers with a high credit score.
Lending Club business loans may be a profitable option if:
Prosper is one more peer-to-peer online lender. It offers personal loans for small business purposes. The company assigns a borrower a grade, which determines the interest rate he receives and the origination fee.
Prosper business loans may be the best option for those who:
Best Business Loans from Direct Lenders
OnDeck offers easy business loans in the U.S. issuing over 8 billion dollars. This lender gives loans for new businesses, as it does not require the high credit score.
OnDeck can give easy small business loans to people who:
Keep in mind that the OnDeck small business loans have the following drawbacks:
This is one of the small business lenders, that offers quick access to working capital. The company can approve up to $150,000 in minutes, as it can automatically obtain the data and verify your bank account. Funding over $150,000 requires a manual review and much more time.
Kabbage business loans are perfect for borrowers who:
However, Kabbage small business loans are one of the most expensive. An APR might be as high as 90% while the fee structure is complicated.
Fundera Lending Marketplace
Fundera cooperates with not so many lenders as the company is very selective about what lenders they partner with. That’s why they don’t have any specific requirements for a borrower.
It offers many commercial options for different purposes, such as SBA and term loans, equipment financing and a business line of credit, invoice financing and merchant cash advance, short-term small business loans, and startup financing option as well as personal loans for business.
According to its FAQ, the commonly required items are:
It is necessary to know that some of Fundera’s partner funders have high-interest rates or fees and they are quite possible, which is not a very suitable option for businessmen.
Featured Business Loan Providers
Where to Look for Financing
We focus on alternative business loans, but you should consider the best banks for small businesses as well. One can apply for the first time business loans from institutions, such as:
How to Get a Small Business Loan
It is much harder to get a business loan than a personal one. Read the tips on how to get new small business loans:
1. Improve your credit. In case your personal credit score is low, the lenders will perceive you as a greater risk.
2. Create a business plan. To get more money from a lender, present a detailed plan. Show your bank statements. Prove why you are better than others.
3. Compare all the available options. Lenders are the ones who make a choice. Nevertheless, try all the options: banks, credit unions, peer-to-peer or private business loans. Compare the rates.
4. Try the appropriate sources. As a rule, big banks give bigger amounts to companies with a good reputation. It’s not easy to get new business loans. However, SBA and online lenders are ready to give them. Choose the lender, whose requirements you can meet.
To choose the best business loan, consider the following factors:
Looking for Options Without Hustle
Despite a wide range of alternative lenders, it is hard to qualify for long term business loans. To choose the best one, you should do thorough research.
LendingClub is perfect for the owners of established companies. OnDeck and Kabbage are great if you’ve started your business recently. If you cannot handle your finances, try hiring a public accountant. Such kind of investment will pay off when your applications get approved.