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Published 10 June 2022

A Quick Guide to Online Business Loans

Applying for an online business loan is now one of the most common ways your organisation can secure funding. You should make sure you go for a trusted lender and carefully compare your options before starting your application.

If you or your organisation has considered applying for funding, you have likely looked into getting an online business loan.

But what do you need to know before you start your application? We’ve put together a guide to help you navigate applying for a business loan online, including how to find a lender you can trust.

» MORE: What is a business loan?

Online business loans at a glance

Can I trust online business loan lenders?

There are a huge range of online business loan providers, from long-established high street banks and their challenger rivals to those internet-only lenders you may not have previously heard of. And not every lender will be as trustworthy as the next.

If you are worried about the legitimacy of a lender, there are a few things you can look for to try to put your mind at ease:

These checks aren’t foolproof, but they can hopefully lead you towards an online lender that you feel comfortable doing business with.

» MORE: How do business loans work?

What is the difference between an online business loan lender and a broker?

When searching for online business loans, you may also come across a number of business finance brokers. It is important to know the difference before choosing which path to go down.

A business finance broker is essentially a go-between, with you on one side and the lender on the other. For a price – whether that is an upfront fee, commission from the lender or both – they can provide you with an overview of your various business finance options, potentially advise you on which product best suits your needs, and can help with the application process.

If you apply directly with an online lender, on the other hand, you will have to take care of the process yourself. The lender will then provide you with the funds if your application is successful.

There are benefits and drawbacks to both methods of obtaining a business loan, so it is important to weigh up which option best suits your specific situation.

» MORE: Do I need a business finance broker?

How much can I borrow with an online business loan?

The amount available through an online business loan will depend on which lender you choose, and your own eligibility.

Borrowing can start from as little as £500, for example if you are applying for a start up loan. The maximum amount you can borrow, meanwhile, will vary. However, many online lenders have an upper limit of £500,000.

» MORE: Why do businesses need finance?

How do I apply for an online business loan?

It is relatively simple to apply for an online business loan. At its most basic level, it will involve you filling out an online application form, and providing the lender with the details and documents they require. This can potentially include a business plan, monthly bank statements, and a cash flow forecast. You can make this process a bit easier by getting all of the required information to hand before you start your application.

Once you’ve submitted your application, the lender will run a credit check, possibly on both your business and personal accounts, and then decide whether or not to offer you a loan.

Before you start applying for a business loan online, it is a good idea to thoroughly compare the various options available. You should keep in mind:

Image source: Getty Images

About the Author

Connor Campbell

Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The…

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