Online Business Loans: The Complete Guide

Camino Financial08 Jan 2024
Online Business Loans: The Complete Guide

In the modern business world, the quest for capital has evolved significantly with the emergence of online business loans.

They've become a go-to option for businesses that crave convenience, speed, and flexibility in funding. So, are you ready to dive into the realm of online business financing? Buckle up as we delve deeper into the world of online business loans.

What is an Online Business Loan?

An online business loan is a type of commercial financing that you can apply for, obtain and manage through digital platforms, usually through a lender's website or app. You can use these loans for many different purposes, including: Many businesses prefer online business loans because of the following:
  • convenience
  • quick application and approval process
  • often more lenient requirements than traditional bank loans
These loans can take many forms, including:

Key Characteristics of Online Business Loans

Online business loans come with distinct features that set them apart from traditional financing options:
  • Fast and Efficient Process. Applying for a business loan online and receiving a quick decision is a significant advantage. It's all about speed and efficiency.
  • Flexible Terms. Whether you need a short-term loan or a smaller loan amount, online lenders often cater to various business needs.
  • High Accessibility. If you've had problems with traditional lenders, online business loans can be your salvation. They often have less stringent criteria, offering a lifeline for startups and smaller businesses.

Best Online Business Loans

Camino Financial

  • Loan amount: $10,000 - $50,000
  • Loan term: 24 months
  • Requirements: At least 12 months in business, $30,000 in annual sales, have an SSN.
  • Unique feature: Camino Financial provides various bilingual resources and tools tailored to help small businesses succeed.
Apply For A Business Loan!


  • Loan amount: Up to $250,000 (term loans), up to $100,000 (lines of credit)
  • Interest rate: APR of 35.4% to 99.9% (term loans), 39.9% to 77.9% (lines of credit)
  • Loan term: Up to 24 months (term loans), up to 12 months (lines of credit)
  • Requirements: 600+ credit score, one year in business, and $100,000 in annual revenue
  • Unique feature: OnDeck offers term loans and lines of credit to suit various business needs.

Accion (Small Business Progress loans)

  • Loan amount: $5,000 to $100,000
  • Interest rate: 5.99% to 16.99%
  • Loan term: 12, 24, 36, or 60 months
  • Requirements: 3 months in business, annual sales depending on the loan, no minimum credit score
  • Unique feature: They use other information to determine your creditworthiness, but they don't offer loans in all states

Funding Circle

  • Loan amount: $25,000 to $500,000
  • Interest rate: APR 15.22% to 45%
  • Loan term: 6 months to 7 years
  • Requirements: 660+ credit score, two years in business, and no bankruptcies within the past seven years
  • Unique feature: Funding Circle offers longer term lengths, up to 7 years, which is unusual for online lenders.

BlueVine (lines of credit)

  • Loan amount: Up to $250,000
  • Interest rate: Starting at 6.2% (which is an APR of 20% to 50%)
  • Loan term: 6 or 12 months
  • Requirements: 625+ credit score, 24 months in business, and $480,000 in annual revenue
  • Unique feature: BlueVine also offers invoice factoring services, making it a good option for businesses with outstanding invoices.

Credibility Capital

  • Loan amount: Up to $500,000
  • Interest rate: APR of 9.49% to 15.49%
  • Loan term: Up to 5 years
  • Requirements: 650+ credit score, two years in business, $200,000 in annual revenue, and no bankruptcies within the past five years
  • Unique feature: Credibility Capital offers fast, transparent loans with no prepayment penalties.

Fora Financial

  • Loan Amount: Up to $1,500,000
  • Interest Rate: Factor rates of 1.1 to 1.9
  • Loan Term: Up to 15 months
  • Requirements: 500+ credit score, 6 months in business, and $180,000 in annual revenue
  • Unique Feature: They offer flexible requirements.

Types of Online Business Loans

Term Loans

This is a standard loan where you borrow and repay a set amount of money with interest over a specified term. These include:
  • small business loans
  • short-term loans
  • long-term loans
  • micro-loans
  • and more
Term loans are a good option if you need a lump sum of cash for a specific, one-time expense, such as purchasing equipment or expanding your business, like small business owners. Apply For A Business Loan!

Lines of Credit

This is a flexible loan where you're given a credit limit and can draw against that limit as you need. You only pay interest on the money you use. A business line of credit is a good option for businesses with inconsistent cash flow or those needing funds for ongoing operational costs.

Invoice Factoring/Financing

This involves selling your outstanding invoices to a lender at a discount. The lender then gives you a significant percentage of the invoice amount upfront. You receive the remainder (minus fees) when your customer pays the invoice. This option suits businesses with cash flow issues due to long invoice cycles.

Equipment Loans

These are loans specifically for purchasing equipment. The equipment itself serves as collateral for the loan. If you default, the lender will seize the equipment to recover the loss. This option suits businesses requiring expensive equipment, like manufacturing or transportation.

Merchant Cash Advances

This is an advance against future credit and debit card sales. The lender provides you with a lump sum of cash upfront. You repay the advance (plus a fee) with a percentage of your daily card sales. A merchant cash advance is a good option for businesses with strong credit card sales but poor credit, although it's generally a more expensive way to borrow.

SBA Loans

These are loans backed by the Small Business Administration (SBA). While the SBA doesn't lend money directly, it sets guidelines for loans made by its partners (lenders, community development organizations, and micro-lending institutions). The SBA reduces the risk for lenders, allowing businesses to get funds at lower interest rates and with more flexible terms. These are good options for various businesses, but the application process can be long and complex.

Pros and Cons of Online Business Loans


  • Speed. Online business loans offer quick application and approval processes. You could apply for a loan today and have the funds in your account in a few days or even hours.
  • Flexibility. From the loan amount to repayment terms, online business loans offer greater flexibility than traditional loans.
  • Accessibility. Online business loans often have less stringent eligibility requirements, making them more accessible to a broader range of businesses.


  • Higher Interest Rates. As an online business, loans are more accessible and often carry more risk for the lender. They can come with higher interest rates.
  • Fees. Some online business lenders may charge additional fees, including origination fees, late payment fees, and prepayment penalties.

How to Apply for an Online Business Loan

Determine Your Needs

Identify why you need the loan and how much funding you require. Ensure that your reasons align with the loan type's use cases. For instance, it's advisable to use equipment loans for purchasing equipment. In contrast, a line of credit may be more suitable for handling uneven cash flow.

Review Your Credit Score

Your business and personal credit scores are crucial in your loan application. Lenders use these scores to assess your creditworthiness. If your score isn't up to par, consider ways to improve it before applying.

Research Lenders

Not all lenders offer the same loan products, so it's essential to research various lenders and compare their loan types, interest rates, fees, loan terms, and requirements. Look for lenders that offer the kind of loan you're interested in.

Prepare Your Documents

Most lenders will require you to provide financial documents that give insights into your business's financial health. These might include income statements, balance sheets, tax returns, bank statements, and a detailed business plan.

Fill Out an Application

Once you've chosen a lender, visit their website and find their loan application page. The application will ask for details about your business, such as your business's name, tax identification number, business structure, and annual revenue.

Submit Financial Documents

During or after the application process, you'll need to submit the financial documents that the lender requires. You may be able to upload these directly to the application portal.

Wait for Approval

After you've submitted your application and documents, the lender will review your application. Depending on the lender, they may get back to you in a few hours, or it might take a few weeks.

Review and Accept the Offer

If the lender approves your application, they will offer you a loan. This will include the amount they're willing to lend, the interest rate, the repayment term, and any fees. If you're satisfied with the offer, you can accept it. Make sure to read the fine print before accepting.

Receive Your Funds

Once you accept the loan offer, the lender will deposit your funds into your business bank account. The time this takes can vary.

Start Repaying

Once you've received your funds, you'll need to start making repayments according to the schedule set by the lender. Ensure you make these payments on time to avoid damaging your credit score and accruing additional fees. Apply For A Business Loan!

Tips to Consider When Comparing Online Loans for Your Business

Interest Rate

The interest rate is one of the most important aspects of a loan. It determines how much you'll pay in addition to the principal (the original loan amount). Be sure to compare the Annual Percentage Rate (APR), which includes the interest rate and other fees, among different lenders. Find competitive interest rates and compare them.

Loan Term

The loan term is the period over which the loan must be repaid. Short-term loans often have higher monthly payments but lower overall costs due to less accumulated interest. Long-term loans have lower monthly payments but more interest over time. Choose a term that fits your business's cash flow.

Repayment Structure

This could be daily, weekly, or monthly repayments. Some loans might also have a balloon payment at the end. Understand the repayment structure and ensure it suits your cash flow and business assets.


Apart from the interest rate, lenders often charge various fees, such as origination fees, service fees, prepayment penalties, etc. Be sure to factor in these costs when comparing loans.

Loan Amount

Different lenders may offer different maximum and minimum loan amounts. Ensure the lender you choose can provide the money you need.

Speed of Funding

Consider lenders known for fast approval and funding times if you need funds quickly. However, be aware that quick loans can sometimes come with higher rates and fees.

Eligibility Requirements

Lenders will have various requirements, such as minimum credit score, time in business, and annual revenue. Make sure you meet the eligibility requirements before applying.


Some lenders may offer more flexible terms, such as adjusting payment schedules or skipping a payment in case of hardship.

Customer Service

Review customer reviews and ratings to see if the lender provides good customer service. Having a supportive and responsive lender can be beneficial, particularly if you run into any issues with the loan.

Choosing the Right Option

Navigating the world of online business loans can seem daunting, but with the correct information, it becomes much easier. These loans offer a more accessible, flexible, and faster way to secure funding for your business than traditional loans. By understanding your business's needs and carefully comparing your options, you can find the online business loan that's right for you.

Camino Financial shines as a reliable option if you are looking for small business financing

We provide various bilingual resources and tools tailored to assist small businesses, making us an excellent choice for your company. Apply For A Business Loan!


Are online business loans safe?

Yes, online business loans can be safe, provided you choose a reputable lender. Always ensure the lender has a secure website, good customer reviews, and meets regulatory bodies.

How fast can I get an online business loan?

The speed of obtaining an online business loan varies by lender, but it can be as fast as the same day or take a few weeks. Generally, online lenders are faster than traditional banks.

Can I get an online business loan without collateral?

Yes, unsecured online business loans do not require collateral. However, these often come with higher interest rates due to the increased risk to the lender.

Are small business loans hard to get?

Obtaining a small business loan can be challenging, especially for startups or businesses with poor credit. However, many online lenders and alternative financing options make it easier than before.

Can I get a business loan with a 500 credit score?

Yes, though it may be more challenging. Some online lenders specialize in loans for businesses with poor credit but expect higher interest rates and fees.

Can you get a business loan with no revenue?

Getting a business loan without any revenue is challenging but not impossible. Lenders may consider other factors like business plans, personal credit scores, and potential future earnings.

Are small business loans secured or unsecured?

Small business loans can be either secured (requiring collateral) or unsecured (not requiring collateral). The type depends on the lender's terms and the borrower's financial condition.

Are small business loans fixed or variable?

Small business loans can have either fixed or variable interest rates. Fixed rates remain the same over the loan's term, while variable rates fluctuate based on market conditions.

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