More and more, owners who do their research are realizing that applying for a business loan online, especially from an alternative, non-bank lender, is typically the best way to go.
Online lenders offer short- and long-term loans, merchant cash advances, and business lines of credit. These are all valuable financing products to generate capital for your small business.
Read on to learn more about why you should apply for a loan online, the different small business funding products that are available, and to learn more about one of the best types of funding options, a small business line of credit.
Why Apply for a Business Loan Online?
Online lenders offer several advantages over banks and traditional financial institutions.
Put simply, these include:
- Faster service and a greater focus on the customer
- More easily met eligibility requirements for most funding products
- Easy online application processes
- Funding of your loan or business line of credit in as little as 1 business day
- Easier management of your loan or credit product
- More transparency on fees, rates, costs, and terms
- Greater flexibility in choosing your ideal small business funding options
What Small Business Loans or Funding Products are Available?
Most lenders who operate online and allow you to apply for a business loan online offer several different loans and credit products. Availability will vary from lender to lender, and there are usually different requirements for each option at a given lender.
In general, though, the following are four key types of small business funding products:
- Short-term business loans, regular loans that are meant to be repaid over a short period of time (months).
- Long-term business loans, regular loans that are meant to be repaid over a longer period of time (years).
- Merchant cash advances, which are repaid automatically as a percentage of debit or credit card sales.
- Business lines of credit, which operate in a manner similar to a credit card but provide cash rather than only being usable for purchases.
Spotlight: Small Business Line of Credit
Small business lines of credit are often one of the best small business funding options that you can obtain. Yet, many people are unclear as to what they are, and commonly ask questions such as, “How does a business line of credit work?”
On a basic level, it works similar to a credit card account, though without the cards. You are approved for a business line of credit limit, and gain access to the account, which allows you to withdraw cash in any amount you choose, so long as it is below the credit limit.
You then repay the outstanding amount, with interest, over time. You can continue to borrow against the business line of credit, provided your total outstanding is below the credit limit.
Once you make a repayment, the outstanding portion decreases, and you can borrow against the small business line of credit again and again, just as you charge your credit card over and over again as you pay it off.
Benefits of a Business Line of Credit
The unique way that a business line of credit works provides several benefits for business owners – benefits you typically won’t have from the other products when you apply for a business loan online.
Specifically:
- You only pay interest on the outstanding balance, not on the total credit limit of a business line of credit.
- You have control and flexibility of how much you borrow, and when, allowing you to better manage your small business finances. This is one of the most appealing aspects of a small business line of credit for business owners.
- A business line of credit typically is harder to qualify for than some of the other types of funding products out there. However, this results in much lower interest rates than many of the other types of products you can obtain.
- Revolving and ongoing business lines of credit let you borrow and re-borrow as much as you need, without having to go through a loan application process and approval every time.
Apply for a Business Loan Online with BizFly Funding
Whether you’re seeking a traditional, long-term, unsecured business loan, or a more dynamic and flexible business line of credit, you should definitely apply for a business loan online rather than through a bank.
Your approval odds are much higher, you’ll get better and faster service, and the minimum eligibility requirements are usually far lower.
One of the best places to apply for a business loan online is at BizFly Funding, a leading alternative lender servicing small businesses in the US market.
To find out more, start the online application process, or contact the customer service team at BizFly Funding, visit their website at https://bizflyfunding.com.
Frequently Asked Questions about Applying for a Business Loan Online
There are various types of business loans and funding products for which you may qualify. Some have higher thresholds or eligibility requirements than others.
For example, a business line of credit tends to have one of the higher credit score requirements of the lot. This is largely due to the risk level for lenders, and the self-directed nature of its use by borrowers.
When you apply for a business loan online, you can compare the credit score requirements from many different lenders, as well as the requirements for the different kinds of small business funding products they offer.
Long-term loans and merchant cash advances often have lower credit score requirements than business lines of credit or short-term loans.
With unsecured business funding, you don’t need to put any money down or offer any collateral in order to obtain the loan.
However, with most small business funding options, including business lines of credit, there are minimum monthly revenue requirements. Lenders will vary in what their particular requirements may be.
Credit score, time in business, and the size of the loan or business line of credit will typically dictate the revenue requirements specifically, with a general minimum level required to even apply.
For most lenders that allow you to apply for a business loan online, typical monthly revenue requirements are usually around $10,000.
Some may require less, and some may require more – it’s quite variable based on the specifics of what kind of loan or funding product you require, and what each lender is willing to accept per their own risk management formulas.
Business loans are often easiest to obtain when you borrow from an alternative, non-bank or private lender. Banks and traditional financial institutions are highly risk-averse, and see small business funding in particular as a high-risk venture.
On the other hand, alternative lenders who allow you to apply for a business loan online often have much more reasonable eligibility requirements.
Business loans, merchant cash advances, and business lines of credit are all typically available from online lenders, with varying requirements for time in business, monthly revenue, credit score, and other details.
In almost all cases, applying for a business loan online – regardless of the type of loan or financing product – is easier and more likely to bear fruit than choosing a bank or traditional lender as your funding source.
Business loans and funding products can generally be categorized based on whether or not collateral is required. Loans that require collateral are known as secured, whereas those that do not are known as unsecured.
If you want to obtain a business line of credit or other form of business loan without collateral, then you’ll want to choose a lender that offers unsecured small business funding products.
Typically, you’ll have much better luck with private lenders, that allow you to apply for a business loan online, than with banks or financial institutions.
Most online lenders offer loans and small business lines of credit that do not require any collateral in order to obtain.
Every lender is different and has a different application process.
However, generally speaking, when you apply for a business loan online, apply for a business line of credit online, or apply for a merchant cash advance online, you first should review the minimum eligibility requirements from the lender.
If you meet those requirements, you fill out the online application for your chosen small business funding product or products.
Approval processes vary, but most online lenders will respond to your application promptly within a few hours to no more than a business day, depending on their policies.
Staff will typically review your application and what you are requesting, and offer an approval decision.
When you apply for a business loan online, speed is definitely in your favor, with many online lenders approving loans the same day, and offering funding within 1 business day.
