Best of
Online Business Loans 2020: Compare Your Options
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Online lenders often provide faster and easier access to small-business loans than banks, though at higher rates.
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.
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.
Easily get real, personalized small business loan rates to compare — not just ranges or estimates.
It’s free and won’t affect your credit.
on Lendio's website
Our picks for
Online business term loans
Credibility Capital - Online term loan
Est. APR
19.99 - 24.99%
Min. Credit Score
680
Pros
- Competitive rates among online lenders.
- No prepayment penalty.
- Extra monthly payments can save interest cost.
Cons
- Short repayment term results in higher payment amounts.
- Requires high minimum credit score and revenue.
- Requires business lien and may require personal guarantee.
- Not available in Nevada, North Dakota, South Dakota, or Vermont.
Qualifications
- Minimum credit score: 680.
- Minimum time in business: 2 years.
- Minimum annual revenue: $250,000.
- No bankruptcies in the past 5 years.
Currency - Equipment financing
Est. APR
6.00 - 24.00%
Min. Credit Score
585
Pros
- Competitive rates among online lenders.
Cons
- Prepayment penalty in some cases.
- Requires business lien and personal guarantee.
Qualifications
- Minimum credit score: 585.
- Minimum time in business: 6 months.
- Minimum annual revenue: $75,000.
- Must have a net loss no greater than 10% over the past 12 months.
OnDeck - Online term loan
Est. APR
9.00 - 99.00%
Min. Credit Score
600
Pros
- Cash can be available within the same business day.
- Requires low minimum credit score.
- Less paperwork than most lenders.
Cons
- Fixed-fee structure means early repayment will not save interest.
- Requires frequent (daily or weekly) repayments.
- Requires business lien and personal guarantee.
Qualifications
- Minimum credit score: 600.
- Minimum time in business: 3 years.
- Minimum annual revenue: $250,000.
- No bankruptcies in the past 2 years.
SmartBiz - SBA loan
Est. APR
6.73 - 10.29%
Min. Credit Score
650
Pros
- Competitive rates among online lenders.
- Faster than getting an SBA loan from a bank.
Cons
- Must have strong financials, supported by personal and business tax returns for the past 3 years.
- Stringent rules on use of proceeds.
- Requires business lien and personal guarantee.
Qualifications
- Minimum credit score: 650.
- Minimum time in business: 2 years.
- Minimum annual revenue: $50,000.
- No bankruptcies or foreclosures in the past 3 years.
Our picks for
Business lines of credit
BlueVine - Line of credit
Est. APR
15.00 - 78.00%
Min. Credit Score
600
Pros
- Offers options for businesses less than a year old.
- Cash can be available within 12 to 24 hours.
Cons
- Short repayment term results in higher payment amounts.
- Requires personal guarantee.
- Not available in North Dakota, South Dakota or Vermont.
Qualifications
- 6-month line of credit
- Minimum credit score: 600.
- Minimum time in business: 6 months.
- Minimum annual revenue: $100,000.
- 12-month line of credit
- Minimum credit score: 620.
- Minimum time in business: 2 years.
- Minimum annual revenue: $450,000.
Fundbox - Line of credit
Est. APR
10.10 - 79.80%
Min. Credit Score
500
Pros
- Cash can be available by the next day.
- Low minimum credit score requirement.
Cons
- Rates are high compared to traditional banks.
Qualifications
- Minimum credit score: 500.
- Minimum time in business: 3 months.
- Minimum annual revenue: $50,000.
Kabbage - Line of credit
Est. APR
24.00 - 99.00%
Min. Credit Score
560
Pros
- Financing up to $250,000 available within a few days.
- Accepts low credit scores.
Cons
- Rates are high compared to other online lenders.
- Must have online checking or PayPal account to verify cash flow.
- Fixed-fee structure means early repayment does not save interest.
Qualifications
- Minimum credit score: 560.
- Minimum time in business: 1 year.
- Minimum annual revenue: $50,000.
OnDeck - Line of credit
Est. APR
13.99 - 63.00%
Min. Credit Score
600
Pros
- Cash can be available within the same business day.
- Requires low minimum credit score.
- Less paperwork than most lenders.
Cons
- Fixed-fee structure means early repayment will not save interest.
- Requires weekly repayments.
- Requires personal guarantee.
Qualifications
- Minimum credit score: 600.
- Minimum time in business: 3 years.
- Minimum annual revenue: $250,000.
- No bankruptcies in the past 2 years.
Our pick for
Invoice factoring
BlueVine - Invoice factoring
Est. APR
15.00 - 68.00%
Min. Credit Score
530
Pros
- Finances larger invoices.
- Cash can be available within the same day.
- Accepts low minimum credit score and short time in business.
Cons
- Not for businesses that do not invoice on net terms.
- Loan amount is tied to the value of your invoices.
- Dependency on customers to pay their bills on time.
Qualifications
- Minimum credit score: 530.
- Minimum time in business: 3 months.
- Minimum annual revenue: $100,000.
Easily get real, personalized small business loan rates to compare — not just ranges or estimates.
It’s free and won’t affect your credit.
on Lendio's website
Summary of Online Business Loans 2020: Compare Your Options
| Lender | Best For | Est. APR | Min. Credit Score |
|---|---|---|---|
Credibility Capital - Online term loan | Best for Online business term loans | 19.99 - 24.99% | 680 |
Currency - Equipment financing | Best for Online business term loans | 6.00 - 24.00% | 585 |
OnDeck - Online term loan | Best for Online business term loans | 9.00 - 99.00% | 600 |
SmartBiz - SBA loan | Best for Online business term loans | 6.73 - 10.29% | 650 |
BlueVine - Line of credit | Best for Business lines of credit | 15.00 - 78.00% | 600 |
Fundbox - Line of credit | Best for Business lines of credit | 10.10 - 79.80% | 500 |
Kabbage - Line of credit | Best for Business lines of credit | 24.00 - 99.00% | 560 |
OnDeck - Line of credit | Best for Business lines of credit | 13.99 - 63.00% | 600 |
BlueVine - Invoice factoring | Best for Invoice factoring | 15.00 - 68.00% | 530 |
Online term loans for small businesses
Term loans transfer to your bank account 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.
Lines of credit for small businesses
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 for businesses
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.
Compare online business loans
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 May 4, 2020
To recap our selections...
NerdWallet's Online Business Loans 2020: Compare Your Options
- Credibility Capital - Online term loan: Best for Online business term loans
- Currency - Equipment financing: Best for Online business term loans
- OnDeck - Online term loan: Best for Online business term loans
- SmartBiz - SBA 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
- Kabbage - Line of credit: Best for Business lines of credit
- OnDeck - Line of credit: Best for Business lines of credit
- BlueVine - Invoice factoring: Best for Invoice factoring
