Best Online Business Loans 2022 – Forbes Advisor
The online business loan application process varies by lender. However, there are some general steps prospective borrowers must take to obtain business financing.
1. Assess your credit needs. Begin the credit process by assessing your company’s credit needs. First, think about why you need to borrow money and determine how much you need to borrow. Use a business loan calculator to estimate monthly payments and review your budget to determine how much you can afford in loan payments each month.
2. Check your credit history and reports. Many business lenders will check applicants’ personal creditworthiness and may require a personal guarantee for business loans. Therefore, be sure to check your personal credit report and check your credit history before deciding on any lender. If you have an established business, it may have its own business credit score, which can improve your chances of approval.
3. Familiarize yourself with the admission requirements. Once you are familiar with your credit history, compare lenders based on their business loan requirements. Most business lenders have minimum credit requirements, require borrowers to have been in business for a minimum tenure, and require a minimum annual turnover. However, others evaluate applicants based on non-traditional metrics and alternative credit data.
4. Gather the required documentation. The documentation required to apply for an online business loan depends on the lender. However, many lenders require at least two years of tax returns and financial records such as bank statements, accounts receivable, and outstanding bills. It may also be necessary to provide a business plan to demonstrate the company’s ability to make timely payments, although this is most common with less established companies.
5. Submit a loan application. After you have compiled your company’s application documents, complete an online application and submit the required supporting materials. Some online lenders further streamline this process by allowing applicants to connect their bank accounts and other financial instruments.
6. Wait for review and approval. Many online lenders offer same-day loan decisions, but the review and approval process can take longer. For example, it may be necessary to provide additional documentation or speak with a lender representative prior to loan approval, which can take up to 30 days to complete the approval process.