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 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.
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.
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 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.
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.
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.