Should You Get an Online Business Loan or a Bank Loan?
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How much do you need?
Online business loans vs. bank loans: At a glance
Online business loans | Bank business loans | |
---|---|---|
Maximum loan amounts | Smaller loan amounts (tend to max out at $1 million). | Larger loan amounts. |
Repayment terms | Shorter repayment terms. Often require daily or weekly payments. | Longer repayment terms. Usually require monthly payments. |
Interest rates | 14% to 99% . | 6.6% to 11.5% . |
Qualification requirements | Flexible. May accept startups and borrowers with bad credit. | Strict. Typically need strong credit and revenue, as well as multiple years in business. |
Application process | Online-based. | May require you to apply in person at a branch location. |
Funding speed | As fast as the same day. | May take several weeks or longer. |
Pros and cons of online business loans
Pros
Streamlined application process with minimal documentation required.
Can receive funding within days or as quickly as the same day.
Flexible qualification requirements; lenders may work with startups or borrowers with bad credit.
Cons
May not have personal customer support; not ideal for building a relationship with a lender.
Often have higher interest rates and smaller loan amounts.
Shorter repayment terms; may require daily or weekly payments.
Pros and cons of bank business loans
Pros
Low interest rates and longer repayment terms.
Larger loan amounts available.
Ideal for building a relationship and getting more personalized customer support.
May be able to bundle multiple financial services from the same institution.
Cons
Slow funding timeline; document-heavy application.
May have to visit a branch location to apply.
Strict eligibility requirements; often need strong credit and multiple years in business.
May require collateral.
How to decide between an online business loan and a bank loan
How much money do I need?
How fast do I need funding?
What can I qualify for?
Can I provide collateral or a down payment?
How much will the loan cost?
What type of customer service do I want?
Ready to get funding?
- If you’re looking for the most affordable option, compare low interest rate business loans.
- If you need financing immediately, explore the best same day business loans.
- If you can’t qualify for traditional financing, learn more about the best startup business loans or the best business loans for bad credit.