Alternative Online Loans

These aren’t your grandparent’s loans. Because it can difficult to qualify for bank loans, a new generation of online, alternative lenders are stepping up to get business owners capital. These lenders offer loans that are basically the same as bank loans, but the rates tend to be higher, while the credit score criteria is more lax. Typically, these loans are for 1 – 5 years and come with a fixed monthly payment. Online term loans can be used for virtually any business need.

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What You Need to Know About Online Business Loans

Pros: Cons:
Reasonable interest rates (7 – 30%) Higher interest rates than bank loans
Quick turnaround time (compared to banks) Little or no mentorship
Less effort and documentation needed May have pre-payment penalty
Fixed, predictable monthly payments Usually requires good personal and business credit
Helps improve business credit score
Available for many uses
May require collateral
Available for many uses Typically, must have 2 years in business

 

Best Uses for Online Loans:

  • Working capital
  • Purchasing inventory
  • Purchasing equipment
  • Refinancing
  • Acquiring other businesses

Nav’s verdict:

If you’re unable to qualify for a bank loan or simply need a faster turnaround time, online lenders are a great option. Applying usually takes less than 2 hours—and you can do it from the comfort of home. The rates are a little higher than bank loans, but the convenience can’t be beat. By making timely payments, these loans can also help you build your business credit rating.

Online Business Loan Offers


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