There are more ﬁnancing options for small businesses available today than ever before, and that includes online lending. What differentiates online lenders from traditional lenders, like banks, is that online lenders typically have a quicker and easier process, from application to funding—making the application process a day or two rather than weeks or months with traditional lenders. What’s more, many online lenders do not require a business plan or speciﬁc assets be identiﬁed as collateral to secure the loan.
Download this worksheet to determine if an online lender right for your small business.
What kind of business would beneﬁt from an online lender?
If you have a business that is established, with a healthy cash ﬂow and is looking to grow, an online lender might be a good ﬁt. Because the qualiﬁcation criteria are often less strict than a traditional bank loan, having a healthy cash ﬂow that demonstrates your business’ ability to service debt is critical to leverage a loan from an online lender. This is important because a loan from an online lender could potentially be costlier than an SBA Guaranteed loan or other loan at the bank.
Online lenders can often evaluate your application and respond much quicker than a traditional lender, so if you are looking give your cash ﬂow a boost during an off-season, take advantage of an opportunity to capture some additional ROI, or you need to make an emergency repair, a loan or line of credit from an online lender can still help, because it will allow you to respond much quicker. Make sure you have the cash ﬂow needed to meet the periodic payments because, depending upon the circumstances of your business, sometimes not borrowing is better than borrowing.
You will answer these and other questions in the worksheet:
·What would I need to apply for an online business loan?
·What questions should I ask the online lender?
·What will the online lender ask me?
Depending upon your loan purpose, how quickly you need to respond, your business’s and your personal creditworthiness, and even the industry your business is in, a loan from an online lender could be an option you should consider. Online lenders often work within industries (like restaurants, for example) that likely wouldn’t qualify for a loan at the local bank.
Learn how OnDeck can help your small business.