Online business loans have become a popular financing option over the past decade as banks have scaled back on loans to small businesses.
With the help of algorithms and technology, online lenders analyze traditional credit standards, such as personal credit score and cash flow, and may also use nontraditional metrics, including social media interactions and online customer reviews. As a result, they can offer quicker and easier access to capital than traditional lenders like banks and credit unions. Borrowing costs, though, are typically higher for online business loans.
Borrowing from online lenders isn’t for everyone, however. If your business is just getting started, you probably won’t qualify. You’ll have to consider other startup-financing options. But if you’ve been in business at least a year and need quick access to cash or can’t qualify for a bank loan, online small-business loans are worth exploring.
You can compare online financing options by product below: term loans, lines of credit and invoice factoring.
For pandemic-related aid, small businesses have a few options, including Paycheck Protection Program loans, which received new funding in late December.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 7 options for you
Lender | Best for | Max loan amount | Min. credit score | Next steps |
|---|---|---|---|---|
Kabbage - Line of credit on Kabbage's website | Best for Business lines of credit | $250,000 | 640 | on Kabbage's website |
Credibility Capital - Online term loan with Fundera by Nerdwallet | Best for Online business term loans | $500,000 | 650 | with Fundera by Nerdwallet |
Funding Circle - Online term loan with Fundera by Nerdwallet | Best for Online business term loans | $500,000 | 660 | with Fundera by Nerdwallet |
OnDeck - Online term loan with Fundera by Nerdwallet | Best for Online business term loans | $250,000 | 600 | with Fundera by Nerdwallet |
BlueVine - Line of credit with Fundera by Nerdwallet | Best for Business lines of credit | $250,000 | 600 | with Fundera by Nerdwallet |
Fundbox - Line of credit with Fundera by Nerdwallet | Best for Business lines of credit | $150,000 | 600 | with Fundera by Nerdwallet |
OnDeck - Line of credit with Fundera by Nerdwallet | Best for Business lines of credit | $100,000 | 600 | with Fundera by Nerdwallet |
Our picks for
Business lines of credit
Kabbage - Line of credit
Max Loan Amount
$250,000
Min. Credit Score
640
Est. APR
9.00-36.00%
Kabbage loans are a good option for business owners with fair credit who want quick access to working capital.
BlueVine - Line of credit
Max Loan Amount
$250,000
Min. Credit Score
600
Est. APR
15.00-78.00%
BlueVine's line of credit provides fast working capital for short-term borrowing needs.
May fund quickly
Fundbox - Line of credit
Max Loan Amount
$150,000
Min. Credit Score
600
Est. APR
10.10-79.80%
Fundbox offers a business line of credit to fill a cash-flow gap, and qualifying is easier than with other lenders.
May fund quickly
OnDeck - Line of credit
Max Loan Amount
$100,000
Min. Credit Score
600
Est. APR
11.00-61.90%
OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.
May fund quickly
Our picks for
Online business term loans
Credibility Capital - Online term loan
Max Loan Amount
$500,000
Min. Credit Score
650
Est. APR
6.99-24.99%
Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.
Funding Circle - Online term loan
Max Loan Amount
$500,000
Min. Credit Score
660
Est. APR
10.13-36.00%
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly
OnDeck - Online term loan
Max Loan Amount
$250,000
Min. Credit Score
600
Est. APR
9.00-99.00%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly
How Much Do You Need?
Term loans provide a lump sum of cash that you repay over a fixed period. Because you can pay them off over a longer period, term loans are usually the better choice for larger investments and long-term growth.
Term loans include the popular SBA 7(a) program, which are loans guaranteed by the Small Business Administration but issued by traditional banks and online lenders.
If you’re looking for financing flexibility, a business line of credit is a better option. You draw on the line — up to a specified amount — as needed and pay interest only on the money you’ve borrowed. Lines of credit are a better choice for short-term expenses. Although the APR may be slightly higher than for term loans, lines of credit provide the flexibility to take out money only when, and as often as, you need it.
Invoice factoring is a way to get immediate cash by borrowing against your unpaid customer invoices, which can help you fill cash-flow gaps while you wait for customers to pay. This type of financing is only for companies that sell goods and services to other businesses and, therefore, have invoices. Typically, invoice factoring costs are higher than with term loans and lines of credit.
To help you compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.
Last updated on December 9, 2021
To recap our selections...
Online Business Loans 2022: Compare Your Options
- Kabbage - Line of credit: Best for Business lines of credit
- Credibility Capital - Online term loan: Best for Online business term loans
- Funding Circle - Online term loan: Best for Online business term loans
- OnDeck - Online term loan: Best for Online business term loans
- BlueVine - Line of credit: Best for Business lines of credit
- Fundbox - Line of credit: Best for Business lines of credit
- OnDeck - Line of credit: Best for Business lines of credit