Online business lending platforms are more and more popular, and are an easy way for small businesses to find loan options that are right for them. In this article, we’ll compare the top online lenders and what they offer. Also, you’ll learn about current small business financing trends and how to navigate applying for funding as a small business owner today.
Small Business Lending Online
Getting business financing from an online lender has become a normal part of many small business owners’ lives. Applications are usually completely digital, and the application process is usually faster and more streamlined than many from traditional banks. Business lending online is typically more flexible about which businesses qualify for loans. Plus, they may be able to get the funding in your bank account more quickly — sometimes within one or two business days.
If you’re a small business borrower who can’t qualify for a business loan from a bank or a traditional lender, turning to an online lender may be the right move. You may be able to get lines of credit, equipment loans, merchant cash advances, commercial real estate loans, invoice factoring, working capital loans, and more at an affordable monthly payment from an online lender.
The Most Popular Small Business Lending Platforms
Even if you know you want to apply for an online loan, it can be a challenge to know where to find trusted business loan options. Here’s a breakdown of some of the most frequently used online lending sites to increase working capital and improve cash flow.
BlueVine
BlueVine offers business banking and a business line of credit, as well as a bill pay solution. Although BlueVine is not a direct lender — its financial products are issued by Celtic Bank — your experience should be largely the same as working with a lender. BlueVine states its requirements for borrowers on its website and provides a fast, easy application.
Great For High Interest Rate
Bluevine Business Banking
Earn 4.0% APY on Bluevine Premier and 2.0% APY on Bluevine Standard when you meet a monthly activity goal. Save time and pay vendors with unlimited transactions via ACH, same day ACH, domestic wires, and international payments. Add up to 5 sub-accounts, each with designated account numbers. $95 (waivable) monthly fee for Premier, $0 for standard. No overdraft fees, no minimum balance requirements. To earn the $300 bonus, customers must apply for a Bluevine Business Checking account anytime between now and 12/31/2024 using the referral code above. After opening the account, customers must add funds within 30 days, then meet at least one of the following eligibility requirements every 30 days for the next 90 days from account funding: Deposit at least $5,000 from eligible merchant services to your Bluevine account Make at least $5,000 of outbound payroll payments from your Bluevine account using eligible payroll providers Spend at least $2,000 with your Bluevine Business Debit Mastercard® and/or Bluevine Business Cashback Mastercard®
Minimum Balance
None
Monthly Cost
$0-$95 (Waivable)
Monthly Free Transactions
Unlimited
Noteworthy Perks
Up to 3.7% APY
Fundbox
Fundbox is known for its fast application and line of credit option. The website breaks down its borrower requirements and includes a calculator for borrowers to figure out the cost of debt. The lender also works with Stripe to allow Stripe customers to access a line of credit directly from its platform. Fundbox also has a well-rated app that allows users to apply and draw funds.
Line of Credit by Fundbox
Nav recommends this product as a great solution for newer small businesses looking for a fast application process and access to a flexible LOC product. Bonus: When you click 'Apply now," we'll securely pass over your info, making applying with Fundbox a breeze. Only answer a few additional questions on their end and you're good to go.
Pros
- 625 minimum personal credit score
- No impact to credit score to apply (soft pull only)
- No draw fees
- Fast approval and funding, with funds available as soon as the next business day
- Use as much as you need, only pay interest on what you use
- Fundbox reports payment activity to all the major commercial credit bureaus via the Small Business Financial Exchange (SBFE), which can help strengthen a business's credit profile.
Cons
- Must have a business checking account with a minimum balance of $500
- May require large weekly payments (0.4% - 0.7% of the original draw amount per week) due to the short repayment duration.
Funding Amount
Cost
Repayment Terms
Funding Speed
Funding Circle
Funding Circle provides online applications for term loans, lines of credit, and SBA 7(a) loans. The platform connects qualified borrowers to institutional investors to get the right financing to the right business. According to the Funding Circle website, its SBA 7(a) loan applicants can receive funds as quickly as 13 days after the application is finalized, which is much quicker than the traditional SBA loan process.
OnDeck
OnDeck offers two financing options, a line of credit and a term loan that you can apply for online or over the phone. The company is known for fast funding — you can get funds in your bank account as quickly as the same day. OnDeck provides requirements for borrowers on its site and offers a loan advisor service. Your loan might come from OnDeck itself or from Celtic Bank.
Term Loan by OnDeck
This is a great option for businesses with consistent revenue, seeking competitive pricing working capital products. OD is known in the industry for their transparency and speed to fund. OD is the largest online lending company, which provides confidence to users with finding the right long-term partner to help fuel their company's growth.
Pros
- One application, two paths to finance your business - applicants are reviewed for both a Term Loan and Line of Credit
- Minimal paperwork
- Fast approval time
- Transparent pricing
- “White Glove” customer service
- Access to multiple lending options.
Cons
- Need a minimum of 1 yr time in business
- $250,000 maximum loan amount
- Not available in all states.
Funding Amount
Cost
Repayment Terms
Funding Speed
Small Business Administration (SBA)
The U.S. Small Business Administration website matches small businesses to its pool of potential lenders. SBA loans are backed by the government, so they usually offer great terms for borrowers. However, these loans are known to require a long application and have longer wait times to receive funds than other options on this list.
SBA Loan by SmartBiz
For high cost projects with long repayment. No immediate funds needed.
Pros
- APR as low as 11.25% with monthly repayment plans up to 10 years
- Ability to be pre-approved and review terms and conditions before needing to provide a full list of financial documents.
Cons
- Lengthy application process (30-60 days) with lower approval odds
- Requires more documents than other Bank Loan products.
Funding Amount
Cost
Repayment Terms
Funding Speed
Nav
When you’re looking for an online loan, turning to Nav is the simplest choice to find the right funding for you out of 160+ financing choices. And you don’t have to do the legwork: Nav uses your business data to personalize your financing options — so you can see the right choice for your business before you apply. Nav is your small business partner, no matter where you are on your journey.
New Business Lending Trends
The pandemic changed the face of small business, but in 2023, it looks like the hardest has passed. There is still talk of a recession, and high inflation is an ongoing problem. Because of these problems, big banks and credit unions are more hesitant to approve loan applications, according to the Biz2Credit Small Business Lending Index. However, the number of approvals increased from online lenders, institutional investors, and small banks. That means that approval odds appear to be on the rise with alternative lenders.
Additionally, annual percentage rates (APRs) have increased to the point that bank rates are not much lower than alternative lenders currently. So many small businesses are choosing to go with a slightly higher interest rate but an easier business loan application and faster funding using online lenders.
Utilizing business credit cards and lowering costs are other ways of coping during this stressful time.
Lending Platforms for New Businesses
Traditional banks and lenders often require two or more years in business before they are willing to hand out a loan offer. On the other hand, many online lenders are willing to lend to startup or newer businesses — some require only two to six months in business. Eligibility does depend on having a minimum annual revenue, however, and will require you to provide bank statements from a business checking account proving your revenue. Businesses without revenue will likely have a hard time finding financing.
Your creditworthiness also matters. You’ll need a minimum personal credit score (the requirements change depending on the lender), so having bad credit can be a roadblock for financing.
Premium Business Lenders
The loan amount you qualify for depends on credit approval, your revenue, and your time in business. If your business has been around for a while and can qualify for many types of business loans, it’s best to shop around. Try traditional banks first and see what their application process looks like, as well as the interest rates they can offer to extend a credit line. Then look into online business loans — the rates may be similar enough that it’s better to get your small business financing from them to avoid the long applications.
If your business needs more funding options or loan programs, turn to Nav. Nav is your small business partner. We use your business’s data to personalize the options you see and the types of financing that are right for you. It’s always a good idea to make sure the repayment terms are right for your business before accepting funding.
Build your foundation with Nav Prime
Options for new businesses are often limited. The first years focus on building your profile and progressing.
Tiffany Verbeck
Digital Marketing Copywriter, Nav
Tiffany Verbeck is a Digital Marketing Copywriter for Nav. She uses the skills she learned from her master’s degree in writing to provide guidance to small businesses trying to navigate the ins-and-outs of financing. Previously, she ran a writing business for three years, and her work has appeared on sites like Business Insider, VaroWorth, and Mission Lane.