Smaller banks have easier approval process but getting approved for a loan with a large bank enables you to take advantage of lower interest rate. If you are thinking of getting a bank loan, you must be able to provide the financial documents and business plan. It can take up to a few weeks for the bank to approve the small business loan. Bank loans are a good option if you don’t urgently need the funds for your business and can wait for the bank.
The alternative to bank loan is to apply for the installment loans online. While bank put emphasis on credit score, online lenders will take into account various factors such as reviews of your business online, social media profile and etc. Because online lenders are less stricter than banks, more business owners are able to get their loans approved in this method.
You can get a loan for your small business online even if it has been operation for less than 1 year.
The advantage is that you can get the loan approval within the same day. The loan amount you can borrow depends on how much revenue your business is getting. The loan amount for online small business loans range from $2,000 – $500,000.
There is a minimum annual revenue and credit score requirement that you must meet in order to get approved. The minimum credit score to get approved for online installment loan is 600+. The online lender will assign you a lower interest rate if your credit report shows a decent credit score.
Some online lenders will give you pre-approval first before sending a confirmation email that your loan is fully approved. Once your loan is approved, you can expect to receive the funding in as little as 24 hours up to a few weeks depending on the online lender. Online business loans offer you the option to repay the loan in 3 months – 10 years.
When applying for an installment loan, you should take a look at the APR interest range. You can accept or decline the loan after they let you know the interest rate you qualify for. Unlike bank, there is usually no penalty fee if you prepay the loan before the loan term finish. Some online loans offer you the option to put a collateral.
Every online lender has own set of requirements for getting approved so you should personally call their customer support telephone number to find out the full list of requirements. Yon can easily sign up for installment loans for your small business by filling an online application form at the loan site. You can also go to the online loan comparison site to compare different loans for small business and apply from there.