9 Best Online Business Loans of April 2024
Updated March 29, 2024 at 4:23 pm
An online business loan can give you an influx of cash to cover a variety of needs, from starting a business to investing in the inventory, equipment and supplies needed to help your business grow and thrive. Many of the best online business loans offer streamlined applications and fast funding. They also tend to be more accessible compared to traditional banks or credit unions, making them a better fit if you have bad credit or are just starting your business.
This guide highlights some of the best small business loans online from top lenders with a focus on loan amounts, interest rates, fees and eligibility requirements. If you need an online business loan now, the lenders below could be the perfect fit.
Our Methodology Newsweek Vault’s loan experts evaluated multiple data points to help our readers make sense of their borrowing options across student loans and personal loans. To narrow down the best available offers, we weigh the product pros and cons across five core categories, including:
- Application process
- Eligibility requirements
- Interest rates
- Loan amounts (minimum and maximum)
- Repayment flexibility
Our Picks -
- Best for Fast Funding: OnDeck
- Best Loan Comparison Site: Lendio
- Best Business Line of Credit: American Express® Small Business Line of Credit
- Best for Growing Businesses: Funding Circle
- Best for Large Loan Amounts: Biz2Credit
- Best for SBA Loans: Live Oak Bank
- Best for Startups: Fundbox
- Best for Microloans: Kiva
- Best for Fair Credit: Bluevine
Best Online Business Loans of 2024
Best for Fast Funding
OnDeck
Vault Verified
Why We Chose It
OnDeck business lines of credit can fund instantly once approved, and term loans can fund the same day for loans up to $100,000 if you apply Monday through Friday before 10:30 a.m.
Pros
- Same-day funding available
- Check eligibility with no credit score impact
- Low minimum credit score requirement
Cons
- $100,000 annual business revenue required
- Lower loan limits than some lenders
- Potential for a high APR
Best Loan Comparison Site
Lendio
Vault Verified
Why We Chose It
Lendio is a business loan comparison site that lets you save time and energy by comparing multiple lenders and loan options in one place. Business owners can use Lendio to compare term loans, lines of credit, equipment financing loans, invoice factoring options and more. The platform has funded more than $12 billion in loans so far.
Pros
- Compare loans among 75 lenders with one application
- Offers term loans, lines of credit, SBA loans and more
- Apply on a desktop or through a mobile app
Cons
- Not a direct lender
- Some loan types come with high rates
Best Business Line of Credit
American Express® Small Business Line of Credit
Vault Verified
Why We Chose It
American Express offers a small business line of credit with low monthly income requirements, a fast and easy application process and flexible repayment terms that can last from six to 24 months. All businesses are unique and are subject to approval and review.
Pros
- Only need to be in business for at least 12 months
- Low monthly business income requirement
- No prepayment penalties or origination fees
Cons
- Each draw is a separate loan with a loan fee
- Higher fees for longer repayment periods
*Fees:
- 6-month loans: 3.0% to 9.0%
- 12-month loans: 6.0% to 18.0%
- 18-month loans: 9.0% to 27.0%
- 24-month loans: 12.0% to 18.0%
Best for Growing Businesses
Funding Circle
Vault Verified
Why We Chose It
Funding Circle’s revenue requirement ($50,000 annual revenue) is much lower than other lenders. Business owners have several types of loans to choose from, and the lender’s term loans offer long repayment terms of up to 84 months.
Pros
- Low annual revenue requirement
- Good variety of loan types, including SBA loans
- Flexible and lengthy repayment terms
Cons
- High minimum credit score requirement
- Requires two years in business
- Origination fees of up to 10.49%
Best for Large Loan Amounts
Biz2Credit
Vault Verified
Why We Chose It
Biz2Credit offers an array of business financing options with high loan amounts and potentially fast approval. Commercial real estate loans can go all the way up to $6 million, though repayment terms are short.
Pros
- Large loans up to $6 million
- Several borrowing options
- Low eligibility requirements for some loans
Cons
- Short repayment terms
- High rates
- High annual revenue requirements for some loans
Best for SBA Loans
Live Oak Bank
Vault Verified
Why We Chose It
Live Oak Bank is a cloud-based digital bank with a long track record of providing low-cost SBA loans. Since 2018, it’s been the top SBA 7(a) lender by loan amount and is a Preferred Lender able to provide faster SBA loans than other lenders.
Pros
- Top SBA lender by loan amount
- SBA Preferred Lender
- Flexible loan amounts and terms
Cons
- Strict requirements to get approved
- Limited information online
Best for Startups
Fundbox
Vault Verified
Why We Chose It
Fundbox offers lines of credit in amounts up to $150,000. With only six months in business and $100,000 in annual revenue required, this lender even works for newer companies who need a short-term business line of credit.
Pros
- Low minimum credit score requirement
- Get approved in as little as 3 minutes
Cons
- Lower loan limits than other lenders
- Short repayment terms
- Reports to business credit bureaus
Best for Microloans
Kiva
Vault Verified
Why We Chose It
Kiva offers microloans for small businesses that need up to $15,000 in funding, and with 0% APR to boot. Applicants also get to market their small business to the 1.6+ million individual lenders that extend funding on the platform.
Pros
- No-interest microloan
- No credit score requirement
- Open to startups
Cons
- Small loan amounts
- Crowdsourcing required
- Slow funding timeline
Best for Fair Credit
Bluevine
Vault Verified
Why We Chose It
Established businesses with sizable annual revenue only need a credit score of 625 to qualify for Bluevine’s business line of credit. And you can get a decision in as little as five minutes.
Pros
- Fast application and approval process
- Low minimum credit score requirement
- Competitive interest rates
Cons
- One borrowing option
- High annual revenue requirements
- Short repayment terms
What Is an Online Business Loan?
Online small business loans can come in different forms with varying loan amounts, repayment terms, interest rates and fee structures. What makes all of these financing options similar is that online small business loans are offered through digital lending companies without any requirements to visit a bank or lender in person.
Online business loans can be used for a variety of business-related purposes, including payroll expenses, the purchase of inventory or supplies, costs associated with marketing or hiring new employees or regular business expenses that need to be paid right away. Some online business loans come with set repayment terms with fixed monthly payments, whereas others let business owners borrow money and pay it back on an as-needed basis.
While borrowing money for business purposes online was once a rare occurrence, even large national lenders may offer the chance to apply for some business loans online. For example, Bank of America lets customers with a Bank of America Online Banking ID apply online for some of its loan products. And Wells Fargo offers an online application for its business line of credit, but only up to $100,000.
Online lenders that operate online-only without any physical branches tend to offer more competitive interest rates, lower loan fees and a more robust selection of borrowing options. Online lenders also tend to offer a more streamlined application process that lends itself to faster funding times as soon as the same day or a few days after approval.
Types of Online Business Loans
Online business loans come in many different forms, with some offering more predictable terms than others. Some small business borrowing options even let you borrow only what you need when you need it, then base your monthly payments on the amounts you access and how long you need to pay the money back.
Term Loans
Term loans for businesses work similarly to other types of installment loans. You can borrow a set amount of money and pay it back over a set period. Interest rates tend to be competitive for this type of loan since it’s more predictable, yet minimum eligibility requirements can be higher as well to qualify for the best rates and terms.
While term loans vary in size and scope, many lenders let applicants borrow anywhere from $5,000 to $2 million and pay the money back over six months to 10 years.
Business Lines of Credit
A small business line of credit works differently from term loans since it lets business owners draw from a pre-approved credit line only when they need to. This lets business owners borrow the exact amount of cash they need and make payments based on those amounts.
While business lines of credit can vary based on the lender, they typically come in lower amounts of $1,000 to $250,000. Repayment terms from online lenders tend to be shorter (typically up to 24 months), and interest rates can be higher than what you’ll find with term loans.
Accounts Receivable Financing
This type of financing, also known as AR financing, lets business owners borrow against their accounts receivable or outstanding invoices and get cash immediately in return. This lets business owners turn the amounts owed to them by customers into instant capital they can use to pay bills or invest in the company.
Like other business loan options, accounts receivable financing comes with interest rates that vary, a diverse set of fees and eligibility requirements that depend on the loan company. Loan limits also depend on the amount of outstanding invoices available to borrow against.
Because accounts receivable financing uses a company’s outstanding invoices as collateral for the loan, eligibility requirements (especially credit requirements) tend to be minimal.
Invoice Factoring
While accounts receivable financing lets business owners borrow against their unpaid invoices, invoice factoring sells outstanding invoices to a third party in exchange for cash. This type of financing leads to the business owner getting a lump-sum payment, although variable factor rates and discount fees must be paid along the way.
Like accounts receivable financing, invoice factoring requires very little in terms of minimum credit or business income requirements. This makes it a solid option for companies who are owed money but may not meet the eligibility requirements for other types of financing.
Merchant Cash Advance
A merchant cash advance is a type of business financing that lets companies borrow against their future revenue. This means that traditional eligibility requirements typically do not apply, and that a merchant cash advance can work for business owners with imperfect credit as long as they can provide concrete proof of future sales.
While loan amounts and terms vary widely for this type of funding, it’s possible to get a merchant cash advance in amounts from $5,000 to $500,000. The downside is that merchant cash advances can come at a high cost and are typically used as a last resort when small business owners can’t qualify for a less-expensive form of financing.
SBA Loans
Government-backed SBA loans tend to have lengthier applications and more hoops to jump through to get approved, and funding can take as long as a few months. But loan amounts can be much higher (up to $5 million) and repayment terms can be as long as 10 to 30 years.
Eligibility requirements for SBA loans tend to be more stringent, and you may need at least two years in business, a credit score of 600 or higher and a minimum monthly business revenue of $8,000 or more to get approved for SBA 7(a) and 504 loans. But eligibility can be far more relaxed when applying for SBA microloans.
Business Acquisition Loan
Business acquisition loans are used to purchase an existing company or franchise, and they can be in amounts from $5,000 up to $5 million. Interest rates, fees and other terms of these loans can vary by lender.
Start-Up Loan
Start-up loans were created for entrepreneurs who need capital to get a new business idea off the ground. These loans can come in many different forms, including term loans, business lines of credit, equipment financing or a business cash advance, and their rates and eligibility requirements vary as a result.
Equipment Financing Loans
Equipment financing loans for businesses were created for the specific purpose of helping business owners invest in new equipment they need. These loans are popular within industries that require significant investments in expensive equipment and supplies, including farming, manufacturing, transportation, restaurants and the medical industry.
Loan amounts, rates and other terms vary for equipment financing loans, although available loan amounts are typically based on the cost of equipment required.
Business Credit Cards
Business credit cards can also work for businesses who need to make purchases and want some flexibility in how they pay the funds off. Most business credit cards don’t come with limits as high as what term loans and some lines of credit offer. But they do have unique perks. This can include the chance to earn cash back and travel rewards, sign-up bonuses and a grace period that could help you avoid paying interest if you pay your balance in full each month. Most business credit cards require good-to-excellent personal credit.
Why Would You Need an Online Business Loan?
An online business loan could be used for nearly any business-related purpose, and it all depends on what your company needs. Some of the most common reasons to borrow money with a small business loan online include:
- Buying a franchise: Business acquisition loans are often used to purchase existing franchises, which can be expensive but worth it due to having an existing customer base. This type of loan can help pay for franchise fees, new property leases, equipment, supplies and other necessities to get the new franchise up and running.
- Consolidating business debts: Business owners with several different debts can choose to take out a new loan to pay off and consolidate all their existing bills. This option works best for business owners who can qualify for funding with a lower interest rate than they’re paying now.
- Covering unexpected expenses: A higher-than-expected tax bill, emergency equipment repairs or legal fees can eat away at your business budget in a hurry. Business loans can help cover these unexpected expenses when you need an emergency cash infusion.
- Funding a new marketing campaign: If you need to invest in a new marketing campaign, a business loan can pay for professional expertise and a full-fledged marketing plan. Ideally, this investment would lead to higher profits that can help you pay back the loan.
- Funding payroll: Missing payroll isn’t an option when your business funds are running low. A business loan or line of credit can help businesses keep paychecks coming during times when cash flow is tight,
- Hiring new employees: It can make sense to borrow money when a business needs cash to grow and expand. A business loan can help pay for the hiring and training of new employees.
- Improving cash flow: If your cash flow is tight and you need wiggle room in your business budget, a small business loan or line of credit can create some breathing room in the short term.
- Investing in equipment or inventory: If you run a business in an industry that requires expensive equipment, a business loan can help cover the cost and let you pay back what you owe over a set repayment term.
- Making necessary repairs or upgrades: A small business loan can help you repair or upgrade aging equipment so you can keep your business up and running.
- Starting a new business: Small business financing can also help you start a new business of your own based on your expertise or an idea you came up with. In this scenario, a start-up loan for a business may work best.
How to Choose the Best Online Loan for Your Business
With so many business loans available today and different loan amounts, repayment terms and eligibility requirements for each, you need to do some research before you apply for business financing. Major factors to consider include the following:
Loan Amounts
Online small business loans are offered in nearly any amount. When applying for a small business loan, choose a lender that offers the amount you need but make sure to choose a loan amount that you can afford to repay. A business loan calculator can show you how much of a business loan you can afford and also help you see how quickly you’ll be able to pay back your debt.
Type of Financing
Decide on the type of online business loan you want as well, whether you prefer to borrow a set amount and make fixed monthly payments or you want the flexibility of a business line of credit that lets you borrow money on an as-needed basis instead. If your credit isn’t great and you are willing to use outstanding invoices as collateral, you could even opt for accounts receiving financing or invoice factoring loans.
Repayment Terms
Decide how long you want and need to pay back the amounts you borrow and remember that some borrowing options lend themselves to shorter repayment terms. For example, some business lines of credit may only let you borrow money for up to 12 or 24 months, whereas term loans and SBA loans can offer much longer repayment options.
Rates and Fees
Consider interest rates and loan fees for the loan types you’re considering, and remember that these factors can depend on your personal credit score, your business revenue, how long you have been in business and other details on your application. Comparing multiple lenders will help you find a small business loan with the lowest possible rates and fees you can qualify for.
Eligibility Requirements
Some companies that offer online business loans list their eligibility requirements directly on their websites, which is helpful when gauging your approval odds. Others are less transparent about their requirements and may require you to contact the lender for details. Before applying for a business loan, make sure you meet the basic requirements, including credit score, annual revenue and time in business.
Loan Purpose
Decide why you need to borrow money and if a business loan is truly necessary. This step can help you figure out whether you can make do with funds you already have, or how much you really need to borrow if you decide a loan is necessary. Also note that some purposes come with specific loan types that apply, like equipment financing loans that are geared to companies who need to invest in new business equipment.
Collateral or Personal Guarantees
Find out whether business loans you’re considering require collateral, a personal guarantee or both. Collateral requirements can vary depending on the loan type. For example, both accounts receivable financing and invoice factoring require collateral in the form of unpaid invoices to qualify.
Most business loans require a personal guarantee as well, which means the business owner is personally liable for repayment even if the business fails. Personal guarantees also give business lenders the right to pursue the personal assets of business owners who default on their loans.
Frequently Asked Questions
Can You Get a Small Business Loan For an Online Business?
You can consider a small business loan for an online business that doesn’t have a brick-and-mortar location. Small business loans can work for industries and businesses like e-commerce, affiliate marketing, consulting, graphic design, website development, social media management and more.
That said, not all applicants will qualify for business financing regardless of the type of company they own. Qualification depends on factors like personal credit, annual or monthly business revenue, time in business and more.
Can I Borrow Money to Start a Small Business?
You can borrow money to start a small business, although you may be limited to lenders that offer start-up business loans. As an example, the U.S. Small Business Administration (SBA) offers microloans in amounts up to $50,000 that are geared to small businesses that need funding to start up or expand.
Can I get a small business loan with no credit check?
The majority of online small business loans require a credit check, although some types of financing have much looser requirements. With invoice factoring loans that use a company’s outstanding invoices as collateral, for example, there are no credit checks required.
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