Times have changed and so has the manner in which many people borrow money, both for personal reasons and for their businesses. The time when you had to go to your local bank and apply for a loan in person has passed with financial technology companies now offering a plethora of options.
With options come struggles. Small enterprises often don’t know where to begin and which option is best, most affordable, and will be the least burden on their business in the long run. To assist entrepreneurs, we have compiled a list of some of the best companies offering small business loans. On this page, you can see these companies and the main details of what they offer. Keep in mind that these are just our suggestions and there may be a better option for your business that isn’t listed.
There are different types of credit available for consumers — payday loans, bank loans, ect. The same is true for business credit. There are a few types of small business loans available, of which these are the more common ones.
- Short-term loans. With terms from 3-18 months, these are the most commonly used for quick access to funds. The application process requires providing bank statements showing the company’s cash flow. Lenders use this and other documentation to assess the company’s health. These loans generally have a higher interest rate.
- Long-term loans. These loans usually have terms stretching up to 25 or 30 years. They also usually have a higher principle for long-term capital projects. These loans often start at half a million dollars. Due to the larger principle, the application requirements are usually much stricter. on million
- Credit lines. These operate similarly to a credit card. They are a quick way to make small improvements or cover a cash flow deficit but are not a good choice for financing long-term capital investments. Credit lines usually have higher interest rates than the previously mentioned types of credit.
Even though small business loans are processed much quicker than when you needed to go to a bank to apply for one, there are still a few things you need to prepare before applying. Different creditors may require different paperwork, but the following are usually required to confirm your businesses operational status and financial situation:
- financial statements including bank statements;
- personal credit reports (sometimes);
- income tax returns;
- a business plan;
- a loan proposal.
Benefits of online lenders
There are a couple of reasons to choose online lenders over traditional ones. First is the time frame — it is much quicker and more convenient to simply apply online. There’s no need to make an appointment or even leave your office. There is usually less paperwork and documentation required from the entrepreneur when using an online lender. Most online lenders have standard forms that are easy to fill out and can be submitted in merely minutes.
The best thing about online lenders is that you will likely receive a decision within a day — sometimes even in mere hours — making it one of the quickest ways for your company to get the cash flow it needs.