As the qualifications for small business loans become more difficult to meet, many small business owners are looking for alternatives. Many have found that going with an online lender has advantages over banks and other traditional lenders, although there are some disadvantages as well.
One of the reasons small business owners are looking at online loans is because they can have their funds in hand quicker. Brick-and-mortar lenders often take more than a month to check a loan application, approve it, and transfer the money to the business. Online lenders, though, often approve loans in less than a week and have the money to the borrower in a day or less.
These lenders also may not look as closely at the applicant's credit score or credit history. In fact, there are some that do not need applicants to have a specific credit score. Instead, online lenders look at other information, including where a business stands on social media and their financial status. Even if a business is newly-established and does not have several years of financial records, an online lender may be able to assist the business with funds, especially if the business does not need a large loan.
Traditional lenders, however, are often able to offer lower interest rates and to provide longer loan terms, which results in lower monthly payments.
If you are interested in a loan for your small business, visit our curated list of top lenders.