These days you can find anything online. In fact, you can even find an online business loan. Some business owners shy away from this option because of the fear of predatory lending. It is possible to find online lenders that will work for your business though.
Is an Online Business Loan for You?
So, is an online business loan right for you and your business? Here are five ways to know.
- You do not qualify for a loan from a traditional lender, like a bank or a credit union.
Online lenders tend to have less strict application requirements, including lower credit score minimums.
2. There is no time to wait.
You need funds quickly. Online lenders typically fund much faster than traditional lenders.
3. You flexible terms.
Online business loans often have more flexibility repayment options.
4. You have invoices or accept credit card payments.
Online lenders often offer invoice financing and merchant cash advance options.
5. It’s impossible for you to wade through the paperwork necessary for a traditional loan.
Online lenders usually have super fast application processes. Most of the time you can apply online for a business loan in just a few minutes.
Where Can I get a Business Loan Online?
There is no shortage of options for online lenders out there. However, you must be careful to choose the best one for you. It is extremely helpful to have a business credit expert help you. Still, here are a few to help get you started on your search.
Remember, details for an individual online business loan or lender, such as interest rates, fees, and credit score requirements, can change frequently. Always check with the lender directly for the most up to date information.
BlueVine offers funding up to $100,000. Annual revenue must be $120,000 or more and the borrower must be in business for at least 6 months. Your personal credit score has to be 600 or above. It is important to note also that BlueVine does not offer funding in all states.
Upstart is an online lender that uses a completely innovative platform for loans. The company chooses to use a combination of artificial intelligence (AI) and machine learning to gather alternative data instead of relying solely on credit score. They then use this alternative data to help make credit decisions.
It can include such mobile phone bills, rent, deposits, withdrawals, and even other information less directly tied to finances. The software learns and improves on its own. You can use their online quote tool to play with different amounts and terms to see the various interest rate possibilities.
To be eligible for a loan with Upstart, you must meet the following qualifications per their website:
- Credit score of 620+
- No bankruptcies or negative public records
- No delinquent accounts
- Meet debt to income standards (they only note they will check this ratio, not what their standards are.)
- Have fewer than 6 inquiries in the past 6 months on your credit report, not including those related to student loans, vehicle loans, or mortgages
Fundbox is a great option because there is no minimum credit score requirement for their line of credit product.
They offer an automated process that is super-fast. Repayments are automatic, meaning they draft them electronically, and they occur on a weekly basis. One thing to remember is that you could have a repayment as high as 5 to 7% of the amount you have drawn currently, as the repayment period is comparatively short. This means you need to be sure you have enough funds in whatever account you connect them to so that it can cover your payment each week.
Founded in 2008 by college roommates, Fora Financial now funds over a million in working capital around the United States. There is no minimum credit score, and there is an early repayment discount if you qualify.
The business must be at least 6 months in operation and the monthly revenue has to be $12,000 or more. There can be no open bankruptcies.
Offering term loans of up to $1 million, Bond Street will ask for both EIN and SSN.
Their offer arrives within 3 days. They will only do a soft credit pull, and a 640 or better credit score is likely to get you a loan. However, they will look at other factors too. For example, they require 2 years in business and annual revenue of at least $200,000.
Lending Club offers term loans. Business loans go up to $300,000. You can get a quote in less than 5 minutes. Funds are available in as little as 48 hours if approved. There are no prepayment penalties.
Annual Revenue must be $75,000 or more. You must be in business for 2 years or more. Personal FICO score of 620 or better is required.
Rapid Advance offers standard, select, and preferred loans. Your company must have annual revenue of $120,000 or more. You must have a personal FICO Score of 580 or better. The minimum time in business is 2 years.
Kiva is an online lender that is a little different. For example, the interest rate is 0%, so even though you have to pay it back it is absolutely free money. They don’t even check your credit. However, there is one catch. You have to get at least 5 family members or friends to throw some money in the pot as well. In addition, you have to pitch in a $25 loan to another business on the platform.
Obtaining financing from OnDeck is quick and easy. First, you apply online and receive your decision once application processing is complete. If you receive approval, your loan funds will go directly to your bank account.
You need a personal credit score of 600 or more. Also, you must be in business for at least one year. Annual revenue must be at or exceed $100,000. In addition, there can be no bankruptcy on file in the past 2 years and no unresolved liens or judgements.
If your personal credit is okay, Accion may be a good fit. It is a microlender, a nonprofit, that offers installment loans to both startups and already existing businesses. The minimum credit score is 575. In some places they will go as low as 500. You don’t have to already be in business, but if you are not, you must have less than $500 in past due debt. In addition, your business needs to be home or incubator based.
Credibly is also a good option for business loans if you are already generating some revenue. They offer short term loans for both working capital and expansion. You must be in business for at least 6 months to qualify, and they will approve loans to those with credit scores as low as 500.
Do You Need an Online Business Loan?
You might. If you fall under any or all of these 5 reasons, an online loan may very well work for you. Business funding is a difficult landscape, and there are many more options than most realize. Consider these options, do your research, and don’t be afraid to ask a business credit expert for help. It could very well propel your business to new heights.