A quick Google search for online small business loans, and you’ll find dozens of funding options available for small business owners. Why would a business owner chose to look online for a business loan? Well, for one, the application and funding process with online loans is extremely fast. Often, pre-approval can take minutes, and funding can take days (even hours).
Lets take a closer look at the kinds of small business funding options (and business loan rates) available online for your business.
Fast SBA Online Loans
There is a misconception among many small business owners that all SBA loans take months before funding is provided. But that’s not always the case. There are a number of small business lenders that have taken advantage of Small Business Administration’s lending programs (including the SBA Express – meant to speed up the lending process) to offer online SBA loans for small business owners looking for fast funding.
Using the SBA Express loan program, participating small business lenders are able to approve business loans ($350,000 maximum with a rate between 6-8%) with a SBA turnaround of 36 hours of receiving a completed online loan application by the small business owner and the entire funding process can be completed within one week.
- Credit Score Required for SBA Loans: 650+
- Rates of SBA Online Business Loans: 6-8%
- Terms of SBA Online Business Loans: 5-10 years
Don't Qualify For an SBA Loan?
Try a mid prime alternative online business loan. A mid prime alternative commercial loan is the middle path between SBA business loans and merchant cash advance business loans. Mid prime alternative business lenders are usually non-bank lenders, that use create online lending platforms that offer quick online approvals and funding.
This type of business loan is perfect for business owners that don’t have the credit to qualify for an SBA loan, but also don’t want to pay high interest rates that they would face with other types of online business advance loans.
- Credit Score Requirement: 620+
- Rates of Mid Prime Alternative Online Business Loans: 8-15%
- Terms of Mid Prime Alternative Online Business Loans: 2-5 years
Cash Advance Online Business Loans
A Business Cash Advance (or Merchant Cash Advance) is the most common type of online small business loan. A cash advance actually is not a loan, but instead a business to business financing agreement in which the business owner agrees to sell future credit card sales and/or bank deposits in exchange for advance funding.
Since this is a sale of future bank deposits, bad credit is accepted. Just about any small business that makes bank deposits each month can qualify for some sort of business cash advance funding. But since approval rates for advances can be as high as 95%, a business that chooses an online business advance should be prepared to pay very high rates (as the lenders are taking a much greater risk by providing this type of high-risk business loan).
The approval process usually takes minutes using an online application. If a small business qualifies — most small businesses do — minimum business financial documentation is required (usually only bank statements). Funding is done fast — usually within 24-48 hours depending on the lender.
- Bad Credit is Ok
- Business Cash Advance Rates: 15-100%
- Business Cash Advance Terms: 4-24 months