Easy Business Loans: Do They Actually Exist?

Easy Business Loans: Do They Actually Exist?
Brenna Lemieux
on September 27, 2017
Read in 4 min

Easy business loans: Do they actually exist?

Knowing how to get a small business loan can mean the difference between success and failure at many points in the life of your business.

And most business owners know that traditional lenders like banks don’t always make it easy on small business owners.

Luckily, there are many online alternatives to banks and credit unions: online business loans are booming right now.

Here’s a look at what’s available and where you might turn for easy business loans based on the age of your business, your revenue, and how fast you need cash.

Small Business Loans: You Have Many Options, But Not All Are Easy

First, let’s get on the same page about the simplest lending options available to small businesses:

Traditional Loans

When we say traditional loans, we’re usually talking about the typical term loans offered by banks and credit unions.

These are easy business loans to understand because they’re paid off in installments just like an auto loan or a mortgage.

As of June 2018, traditional lenders are at a post-recession high for small-business loan approval rates, according to Biz2Credit’s monthly index.

Despite that, many small (and new) businesses still have trouble getting approved for bank loans, which brings to our next easy loan option…

Direct Online Lenders

If you’re looking for an easy business loan application, consider that online lenders often have a single funding source and standardized underwriting.

Compared to the old-school banks, these alternative lenders may be more likely to approve small business loans –

And since everything is done online, they’re often faster too!

Peer-to-Peer Lenders

These are online lenders that pool money from individual investors.

While these P2P loans might not be easier to qualify for per se, you can use peer lending to tap into an online following or some other pre-existing audience.

They offer a variety of terms and benefits but may have a longer request-to-funding runway than other alternative lenders.

Microloans & Grant Programs

Who needs an easy business loan when you can get a grant?

While the SBA doesn’t offer grants for-profit businesses, there are state programs and nonprofits around the country offering microloans for certain business activities or business types.

The request process is usually rigorous, so unless you’re committed to learning the system, this might not be the best option.

Try These Easy Business Loans For When…

You Need Money Fast

If you need money within days or weeks, banks, credit unions, and peer-to-peer lenders might not be your best bet, as they tend to take longer to approve requests.

The flip side of this is that they may have more favorable interest rates or more flexible repayment plans.

But if getting money immediately is your main imperative, the down-the-road stuff may not matter as much.

When you’re in a rush, try starting with direct online lenders.

These lenders are often built specifically to improve turnaround time for approvals.

In some cases, you may get funds in as little as a few days.


You Don’t Have Much Revenue

Traditional lenders almost always have minimum revenue requirements for loan eligibility, and many alternative lenders require minimum revenues of $100,000 or $150,000.

If you hit that threshold, getting an online loan may be relatively easy.

If you don’t make that much, peer-to-peer sites and some direct online lenders may be your best bet.

Many online alternatives sprang up specifically to meet the needs of newer and smaller businesses, which banks and credit unions weren’t serving.

If you’re having trouble finding a business loan fast enough for your needs, consider opening a business credit card instead.


You’re a Brand-New Business

The irony of getting business loans is that it’s much easier to do when you have more money – i.e. when you don’t need a loan as badly.

Still, if your business is less than a year old, it’s possible to find loans online that will help move your business forward.

Alternative lenders tend to be better here, but even among them, some prefer to lend to more established businesses.


You Want a Flexible Repayment Plan or Hate Fees

When your business is slightly more established, your funding options expand and you can afford to be picky about things like APR, origination fees, late payment fees, repayment schedules, and more.

Traditional lenders may shine in this category, especially if you can afford to wait a while for the money to come through.

If you don’t quite qualify, though, there are also a number of online lenders who may have different criteria and lower overall costs.


Other Considerations When Finding a Business Loan

To make the borrowing process as easy as possible on yourself, know that loans vary by far more than their dollar amount.

That’s one reason it makes sense to comparison shop before committing to a loan.

Some features to consider:

  • Fees: Origination fees are common, but some lenders charge fees for other behaviors as well, including payments that don’t go through, late payments, and payments made by check. Make sure you understand exactly what you’ll be charged for before signing on the dotted line.
  • Interest rates: These may vary with the repayment period and the borrower’s (or the business’s) credit score. Shop wisely here: lenders may advertise their lowest rate, but that doesn’t mean it’s what you’ll be getting.
  • Time to funding: Understand your timeline heading into the application process. If you need funds by the end of the week, don’t waste your time applying with a bank.
  • Repayment terms: Some lenders have rigid structures and some are much more flexible. Be sure to ask about repayment options and associated interest rates before making a commitment.
  • Application process: Some online lenders let you apply in just minutes; SBA-backed loans may take weeks to apply for. In either case, having the right information or paperwork handy can maximize the efficiency of your application process.
  • Effect on credit score: Peer-to-peer sites designed for personal loans may be structured to lend money to you as a business owner rather than as a business. If so, your personal credit may be on the line as you repay – something to consider seriously.

Looking to connect with a lender? Start the process now with our easy online form:

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Brenna Lemieux Finance Journalist

Brenna Lemieux is the author of The Gospel of Household Plants, a notary public, and an enthusiastic content marketer.

She lives and runs in Chicago.

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