Getting a loan for your business can seem like an uphill battle. It’s especially hard to find the right financing when you’re:
The thing is that getting a business loan in the US has become much easier and more accessible in the last couple of decades. In fact, the increasing number of alternatives is what is making loans more accessible to small or new business owners.
Traditional banks still offer many established businesses exactly what they need. However, they often fall short when it comes to speed, ease, and access.
If you recently started a business and you are going through the typical business growing pains, banks may not want to deal with you at all. The same stands if your credit score is low after taking an early hit in business.
So, when you’re not getting the service you need from a bank, you can look for what you need in other places.
Where Is It Easiest To Get A Business Loan?
There are many alternative lenders available offering easy business loans. They can usually be found online. These alternatives are becoming very popular, and there are a few reasons for that.
First, these lenders offer a wide range of services. They provide loans to business owners with a wide range of credit scores and financial histories.
Like banks, they may prefer working with successful and highly established businesses. But if you are new to business or have any particular financial challenges, they’ll likely still have something to offer you.
Some examples of lenders that provide easy business loans online are Fundbox, Iruka Capital, and BlueVine.
Fundbox’s main offer is a business line of credit. This makes their offer a versatile option.
Business lines of credit give you the freedom to finance many different expenses on your own terms. The main downside is that they carry higher APRs than other kinds of loans. Fundbox’s line of credit is no different.
Still, the benefit to their line of credit is clear. You don’t just have to take out a lump sum of cash; you get to decide how much money you need to borrow and when.
Fundbox’s application process is simple and they will deal with business owners with many levels of experience. They deal with customers with widely varying credit scores as well.
These options are ideal for any business struggling with their everyday finances. They are also more flexible than other loan providers.
For example, if you take a merchant cash advance, they’ll only charge you once you’ve been paid through a credit card company they work with. When you’ve been paid, the credit card company deducts a small amount of the payment from the transaction.
There are a few amazing benefits to this, starting with the fact that you don’t need to struggle with large monthly payments. This helps you avoid ever-rising debt expenses.
If cash flow is not the greatest, you don’t need to worry about falling short on a monthly payment and incurring more debt. If things are going well, then you still have less to worry about than you do with other business lending options.
BlueVine offers an invoice factoring service that works best with large invoices. This offers some useful benefits for business owners.
The company offers business-to-business (B2B) invoice factoring to business owners across the US. They also offer other business financing services, but they have higher requirements and aren’t BlueVine’s primary focus.
BlueVine is well-regarded by customers for its ability to help them with their business cash flow problems. Getting an advance on your invoices can indeed be a great way to solve short-term problems without creating undue long-term risk.
This option works well because it offers peace of mind. You can finance your invoices with their help, without the need for long-term contracts and unnecessary hassles.
The Requirements For An Easy Business Loan Online
Most easy business lenders will still have some simple requirements for a borrower. They typically are not very demanding with credit score if you are willing to provide collateral.
If you want an unsecured loan, you will still have lower than average requirements. But minimum credit scores and revenue conditions will be tougher to meet.
In addition to this, you have to share some basic business documents. You must prove that you are properly licensed and have a legitimate business.
Beyond the simple credit score checks and basic documents, even easiest online business lenders want to check the financial history of your business. This will typically include records from your accounting software or business bank account.
Each of the lenders discussed above carries a different set of requirements. The good news is that none of their requirements is particularly difficult to meet.
These lenders offer good examples of the requirements you can expect from similar online business lenders:
Other Factors To Keep In Mind
When looking for easy business loans online, there are a few things you should keep in mind.
First of all, these lenders offer different kinds of loans and will offer different levels of service. As you would with any lender, make sure you understand the terms on any loan you take.
Business Term Loans & Lines Of Credit
In the case that you take a term loan, line of credit, or similar loans, do some homework. Look ahead and calculate the amount you will have to pay back each month
Paying attention to all the rates on these simple business loans is critical. Because these loans collect payments from you after you borrow, you can run into cash flow problems if you fail to pay.
Whether you’re in a good financial situation now or not, you must find out if you would be able to handle extra interest payments.
Invoice & Inventory Loan Options
Options like invoice or inventory factoring require a different set of checks. The same goes for merchant cash advances.
These types of loans don’t charge you scheduled repayments like the above kinds of loans do. However, they do end up charging you a lot over time.
The benefit in this is that you don’t need to worry about missing a hard deadline and getting charged high interest rates. At the same time, you should look into how these payments will affect your cash flow.
You’re not paying for these financing options in large, scheduled payments. However, they still end up costing you and can lead to cash flow problems if not used effectively.
Picking The Right Lender
The Right Lender
The right business lender for you will offer you the best terms based on what you can bring to the table. They will assess you based on your credit score and business’s financial situation. You can asses each lender whose requirements you meet based on the terms on the loans available to you.
Your decision-making process can follow a few simple steps:
The Right Loan
Choosing the right kind of loan is as important as choosing the right lender. Each kind of business loan was formatted with specific uses in mind.
Before you go ahead and take a loan, you should consider what exact financial problem you’re looking to solve.
Are you trying to…
Each of these objectives requires a different kind of loan if it is going to be dealt with effectively.
In general, recurring expenses are best dealt handled with:
On the other hand, large expenses are best financed with term loans. Lines of credit can also serve that purpose.
What If My Credit Score Is Low Or My Business’s Finances Aren’t Currently Ideal?
Unfortunately, there is no magic button when it comes to business financing. Many lenders, even easy online business lenders, will turn applicants down.
The good news is that there are almost always other options. Whenever you don’t meet one lender’s qualifications, you can look for another.
In most cases, you can still access these easy business loans online. The catch is that it will carry further requirements.
The easiest way to get approved by online business lenders when your credit score is low and business financial information are below their expectations is by offering collateral. Offering collateral should get you approved by many lenders who wouldn’t give you an unsecured loan.
Of course, you must exercise even more caution if you choose to put up collateral. If you fail to pay back your debts, you can quickly find yourself in even more trouble.
Raising Your Credit Score
To gain access to better terms, you will need to raise your credit score. You can do this by taking out loans with minimal risk and paying them off in full.
One good way to do this is by getting a business line of credit. Once you have one, draw funds in small amounts over time. If you pay back the funds you draw quickly and in full, you will see your credit score go up over time.
More importantly, always avoid taking a hit by taking loans you’re not sure you can afford. Maintaining a good credit score is always easier than building one up.
Of course, you can also opt to use the kinds of business loan options that don’t require a high credit score. For example, the options offered by Iruka Capital don’t have credit score requirements.
Resorting to easy business loans online is a faster and more convenient option than going to traditional banks. You can get approved faster, with less paperwork, and with lower requirements.
As long as you take the lessons we described to heart, you can safely finance your important business expenses quickly and easily online.