Online business loans come in many forms and may be easier to qualify for than a bank or credit union loan. Online lenders often offer streamlined applications, relaxed eligibility requirements and a quick turnaround. This means less paperwork for you and funds in as little as 24 to 72 hours. Rates on online business loans vary widely, so be sure to compare lenders to find the best deal.
7 best online business loans
Best business loan marketplace: Lendio
If you want to quickly find the best business loan for your situation, consider the Lendio marketplace. Lendio lets you compare 75+ partners with just a single application. You can search for SBA loans, lines of credit, merchant cash advances, accounts receivable financing, equipment loans and more.
Lendio is highly rated by past customers, who praise the company for its fast, streamlined application process and its loan officers who can help you narrow down the best loan for your needs. Funding times are fast too: as soon as 24 hours in some cases. But be prepared to receive a large number of marketing calls and emails.
Best short-term loans: OnDeck
OnDeck offers two types of short-term loans: lines of credit (LOC) and term loans, with amounts from $5,000 to $250,000. But rates can run high, with average rates of 60.9% APR and 52.6% APR for its term loans and LOCs, respectively. But this may be a fair tradeoff for fast funding, which may be as quick as same-day.
To qualify for an OnDeck loan, you must be in business for at least one year with $100,000 in annual revenue and have a minimum credit score of 625. On the plus side, there are no prepayment penalties on its term loans or draw fees on its line of credit (LOC), helping you save money.
Best long-term loans: Funding Circle
Funding Circle is a direct lender that has funded over $19.4 billion to over 130,000 companies since it was founded in 2010. Its term loan amounts start at $25,000 and reach up to $500,000 with no prepayment penalties and repayment terms between 6 and 84 months.
To qualify for a loan with Funding Circle, you must be in business for at least two years and have a minimum FICO score of 660. It has a relatively low annual income requirement of just $50,000. But, if your loan is funded, you'll be on the hook for an origination fee between 4.49% to 8.49%.
|Loan amount||$25,000 – $500,000|
|APR||as low as 7.49% interest rate|
|Min. Credit Score||660|
Best line of credit: BlueVine
BlueVine offers lines of credit up to $250,000 with a relatively low starting APR compared to other lenders. To qualify, you need a minimum FICO score of 625 and at least two years in business with a minimum of $40,000 in monthly revenue.
Bluevine's lines of credit are revolving, so you can borrow what you need and repay as you go. But repayments are weekly for new businesses or monthly if you've been in business for at least three years. If approved, you can get funds sent to your bank account in a few hours for a small fee.
Best merchant cash advance: Credibly
Best for newer businesses or those with a low credit score, merchant cash advances from Credibly offer up to $400,000 with a factor rate of just 1.1. The application takes about 10 minutes to fill out, and if you're approved, you could have money in your bank account in as little as 24 hours.
Credibly only requires a minimum credit score of 500 and just 6 months in business. But you must be able to show $15,000 a month in average monthly bank deposits. And be aware that Credibly charges a one-time fee of 2.5% on your total advance amount and charges a $50 monthly admin fee.
|Loan amount||$5,000 to $400,000|
|Starting Factor Rate||1.1|
|Min. Credit Score||500|
Best for high-risk industries: United Capital Source
United Capital Source is a highly rated connection service that specializes in helping business owners with bad credit, newer businesses and higher-risk businesses that perform well but can't show it because they deal mostly in cash.
United Capital offers loans to higher-risk industries, like cannabis dispensaries, and is friendly to women-owned businesses and business owners with a credit score below 600. It offers lines of credit, merchant cash advances, SBA loans and receivables financing with terms from four months to 30 years.
|Loan amount||$10,000 – $5,000,000|
|Min. Credit Score||550|
Best equipment financing: National Funding
National Funding business loans
Finder Rating: 4.65 / 5 ★★★★★
National Funding is a direct lender that offers new and used equipment financing and leasing up to $150,000. It offers a streamlined online application process and lending specialists to help you find the right financing. If approved, you can get up to 100% of your equipment funded with $0 down.
The company also offers a lowest guaranteed payment promise on its equipment lease payments. If you find a lower payment elsewhere, it will give you $1,000 in cash. National Funding gets overwhelmingly positive customer reviews and offers early payment discounts to help you save.
|Loan amount||$5,000 – $500,000|
|APR||Starting at 6.25%|
|Min. Credit Score||600|
Methodology: How we chose these lenders
- Application process
- Credit score minimums
- Customer service reviews
- Eligibility requirements
- Extra features
- Funding turnaround times
- Lender reputation
- Minimum and maximum loan amounts
- Products offered
- Willingness to work with risky industries
We also search for lenders that cater to a range of needs, including those that work with bad credit, newer businesses and high-risk industries.
How to compare online business loans
Here are the top things to keep in mind when comparing online business loans:
- APRs. These vary wildly by loan type — anywhere from 6% to 80%+ APR — and largely depend on your creditworthiness, income and time in business. Compare multiple quotes on the same loan type to make sure you’re paying a reasonable APR.
- Origination fees. Depending on the lender and your credit profile, you may be on the hook for origination fees from 0.05% to 10% on your loan. However, not all lenders charge these, and you may not have to pay them if you have good to excellent credit.
- Additional fees. Ask about any additional fees you may be responsible for, including prepayment penalties, late fees and ongoing administrative fees.
- Repayment terms. Each loan has its own repayment schedule. A term loan might have monthly repayments, while a merchant cash advance might require weekly or even daily repayments. Make sure you understand how your loan’s repayments work.
- Customer support options. Navigating the world of business loans can be confusing. If you’re a newbie borrower, consider a lender that offers personalized support to walk you through the options available. You may find loans you didn’t know about that may work better for your situation.
- Digital experience. Most online lenders offer a fast, streamlined digital application, but you may also want to look into whether the lender has a mobile app to help manage your loan and repayments.
- Customer reviews. Customer reviews on sites like Trustpilot and the Better Business Bureau (BBB) website can give you good insights into how other customers fared with a particular lender.
How online business loans work
Online lenders rely on technology to process and underwrite your loan. They typically offer streamlined, low-doc applications that can be approved within hours and funded in a few days or less. However, in some cases, you may be able to find lenders that can offer funding the same day you apply if you qualify. Depending on the type of loan or financing you choose, you may receive a lump sum amount in your bank account or access to a line of credit with a credit card or checking account.
Pros and cons of online business loans
Here are some of the top pros and cons of getting an online business loan:
- Multiple loan options available
- Loans from $1,000 to $5 million
- Less stringent eligibility requirements
- Streamlined application processes
- Faster approval and funding
- Personalized support
- Potentially high APRs and origination fees
- May be more expensive than bank or credit union loans
- May be the target of scammers online
Compare other online business loans
Use our table to compare lenders, and then select Learn more to visit the lender’s site or More info to read our review.
Types of online business loans
Term loans and lines of credit are popular types of financing. But other options may be better for your business — especially if you’re a new business owner or have a lower credit score. Each lender may offer different minimum or maximum loan amounts and terms. However, we broke down a general idea of what you can expect with each loan type.
|Short-term loan||$2,500 to $500,000||1 to 2 years||Businesses looking for working capital|
|Long-term loan||$10,000 to $2,000,000||2 to 10 years||Businesses looking for working capital|
|Business line of credit||$1,000 to $500,000||1 to 2 years||Businesses needing a flexible source of funding|
|Business cash advance||$5,000 to $2,000,000||Up to 2 years||Newer businesses and those with a lower credit score|
|Accounts receivable financing||Tied to receivables||Up to 1 year||Newer businesses and those with a lower credit score|
|SBA loan||Up to $5,000,000||10 to 30 years||Businesses looking for working capital|
|Startup loan||Up to $150,000||30 days to 5 years||New businesses|
|Equipment financing||$5,000 to $5,000,000||1 to 5 years||Businesses that need equipment and don’t want to tie up cash and other loans|
Short-term vs. long-term business loans
Long-term business loans tend to offer higher loan amounts with a longer repayment period and potentially lower APRs than short-term loans. Here’s a breakdown of the key differences:
|Typical loan amount||$2,500 to $500,000||$10,000 to $2,000,000|
|Term length||1 to 2 years||2 to 10 years|
|Interest rate||8% to 36% APR||As low as 6% APR|
How to prequalify for a business loan
Prequalification involves answering a series of questions about yourself and your business to determine your eligibility before you formally apply for a loan.
Here are the general steps:
- Visit the lender’s website and fill out the prequalification form.
- Provide information about yourself and your business.
- View your loan options and compare offers.
Once you’ve narrowed down your options based on your prequalification offers, you can formally apply for a loan with the lender of your choice.
How to apply for a online business loan
Applying for an online business loan typically follows these 5 steps:
- Determine the financing you need. Online business loans come in many flavors. Choosing the right option ensures that you have enough cash, in the right form, when you need it. Talk to a loan officer if you have any questions.
- Check your eligibility. This step involves checking your personal and business credit scores, tallying your revenue, verifying your time in business and determining if you have any collateral to pledge if you choose a secured loan.
- Gather your documentation. Required documents typically include bank statements, tax returns, financial statements and other documents. You may also need to provide a business plan and personal guarantee for some loans.
- Complete the application. Fill out the full application, upload documents or link your financial accounts and review the application for accuracy.
- Wait for approval and funding. Next, you need to wait for approval and funding. Online lenders tend to have fast approval and funding times, which means you could have cash in a few business days or even sooner.
What should I do if I was denied a business loan?
If you’ve been denied a business loan, here are 3 steps you can take to potentially correct the situation:
- Ask the lender why they said no. Call the lender to discuss your application and ask for the specific reasons your application was rejected. You may be able to correct the problems and resubmit your application.
- Take corrective action. Once you know the reasons for the rejection, you may be able to rectify the situation. For example, there may have been missing or inaccurate information on your application, or your financials or credit score could have been stronger before you applied.
- Prepare a new application. When you’re in a position to reapply, you can try for the same loan with the same lender — or consider an alternative form of financing that you’re more likely to get approved for.
It’s often easier to get approved for a secured loan backed by business assets. You could also apply for a personal loan.
Alternatives to online business loans
Not ready to take out a business loan? Consider these alternatives:
- Personal loan. You may be able to use a personal loan for business expenses. Personal loans aren’t based on your business financials or time in business, making them ideal for new business owners.
- Business credit card. For small cash flow needs, consider a business credit card. Not only can they help build your business credit score, you can earn perks like points or cash back on your business expenses.
- Grants. For free funding, consider a business grant. These are available through federal and state government agencies, as well as private corporations. But they’re competitive and funding can take months.
- Investor financing. For those in innovative industries, money from an angel investor can give you the cash you need to get your business idea off the ground — but you give up equity in your company in return.
- Crowdfunding. Crowdfunding is not only a popular marketing tool — it’s a great way to judge interest in your product or service and gain potential customers while you drum up funding for your business.