Compare non-bank business loan alternatives | finder.com

Compare the best non-bank business loans

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Looking for better rates and more flexible terms on a business loan? See what non-bank lenders have to offer.

Non-bank lenders often provide businesses with added flexibility as they’re privately-owned institutions that aren’t subject to the confinements of a banking license. They also get their funding from numerous sources that offer better flexibility and options, making non-bank business loans increasingly preferable among American businesses.

If you’re thinking about financing, limiting your options to regular banks could cost you. Your business deserves to know all the options available, especially if these options can provide you with better rates, fees, loan terms and even customer service.

LoanBuilder, A PayPal Service Business Loans

Our top pick: LoanBuilder, A PayPal Service

Customizable business loans with no hidden fees.

  • Min. Amount: $5,000
  • Max. Amount: $500,000
  • One-time fixed fee charged over the life of the loan
  • Acclaimed customer service
  • Requirements: $100,000+ annual revenue, 1+ years in business, 600+ personal credit score

    Compare a range of non-bank business loans

    Rates last updated December 16th, 2018
    Unfortunately, none of the business loan providers currently offer loans for these criteria.
    Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
    LoanBuilder, A PayPal Service Business Loans
    Customizable loans with no origination fee for business owners in a hurry.
    $5,000
    $500,000
    Annual business revenue of at least $42,000, at least 9 months in business, personal credit score of 550+.
    LendingTree Business Loans
    Multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
    Varies by lender and type of financing
    Varies by lender and type of financing
    Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.
    Credibly Business Loans
    Funding to cover business expenses with daily or weekly repayments.
    $5,000
    $250,000
    500+ personal credit score, 6+ months in business, $15,000+ average monthly deposits
    Lendio Business Loan Marketplace
    Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
    $500
    $5,000,000
    Must operate a business in the US or Canada, have a business bank account and have a personal credit score of 560+.
    National Funding Small Business Loans
    Working capital loans and equipment financing, some high-risk industries may be eligible.
    $5,000
    $500,000
    Be in business at least one year and make at least $100,000 in annual sales. Other loan types have additional requirements.
    LendingClub Business Loans
    With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
    $5,000
    $300,000
    12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better
    OnDeck Small Business Loans
    A leading online business lender offering flexible financing at competitive fixed rates.
    $5,000
    $500,000
    500+ personal credit score, 1+ years in business, $100,000+ annual revenue
    Fora Financial Business Loans
    No minimum credit score requirement and early repayment discounts for qualifying borrowers.
    $5,000
    $500,000
    Business age 6+ months. Monthly revenue $12,000+. No open bankruptcies.

    Compare up to 4 providers

    What types of non-bank business loans are available?

    How to find the best non-bank business loan for you

    There is no one “best” business loan on the market, as it will depend on your particular situation. However, keep the following in mind when comparing your options:

    • Can my business afford it? As the most important factor in your decision making, be well aware of all loan costs as well as your repayment ability over the next few months.
    • What’s the interest rate? Make sure you know the difference between fixed and variable interest rates and how they can impact your business. Also be cautious of variable interest rates that exceed your repayment ability.
    • What’s the APR? This combines the loan’s interest rate, fees and other charges into one single percentage to help you better compare your options.
    • What are the fees? Be aware of one-off fees such as application fees, exit fees and termination fees. Other charges include ongoing fees such as service and advance fees.
    • How will I repay the loan? Lines of credit don’t have fixed repayment terms, but lump-sum term loans do and will usually cost you the loan amount plus interest over the loan’s term. Also keep in mind that lenders are usually more flexible with repayments for business loans than personal loans, so check your lender’s repayment terms before applying.
    • Secured or unsecured? The difference between a secured and unsecured loan is huge, with one requiring you to put up assets as collateral for the lender while the other loan type has no collateral requirement (usually meaning higher rates). The right choice depends on your particular situation.

    Pros and cons of borrowing from non-bank lenders

    • Flexible rates. Non-bank lenders are privately-owned institutions, which enables them to be flexible with rates and fees.
    • Customer service. Non-bank lenders usually have better customer service than regular banks. This includes better service, better communication and quicker decision-making.
    • Fewer loan requirements. Generally, non-bank lenders have fewer loan requirements than larger banks. Also, a large portion of non-banks lenders don’t require real estate as security, which can be a huge advantage for American businesses.
    • Inconsistent rates. Rate flexibility is a double-edged sword, which may mean rate volatility. Since non-bank lenders have several sources of funding, they may or may not pass rate cuts on to consumers.
    • Vulnerability. Non-bank lenders are vulnerable in times of economic downturn due to their dependance on a steady economy and their difficulty accessing capital during these times.

    Compare bank loans now

    What pitfalls should you avoid?

    It’s important to be cautious of debt. Avoid borrowing too much money and learn exactly how much debt your business can handle. Also, try not to apply for amounts that exceed your business needs. Understand all the fees involved, including one-off and ongoing fees, and be aware of interest rates that exceed the market rates as well as your ability to repay.

    It’s also important to be cautious of applying too many times for credit products. Applying for multiple loans may negatively affect your credit history and your ability to be approved for future loans. Take your time comparing your business loan options and apply only when you meet all eligibility requirements set out by the lender.

    Lastly, with newer lending platforms comes the opportunity for scammers to take advantage of people looking to borrow money online. Be sure to watch out for business loan scams and know the warning signs before handing over any personal or financial information.

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