Compared to bank loans, the process is a lot more pleasant. The interest rates are higher than what banks would offer but it’s more accessible and convenient. If you don’t have strong collateral or can’t wait for 3+ months, online term loans are the way to go. You can even get an online term loan first as a bridge while applying for an SBA bank loan. You can pay off the loan when you receive your SBA loan. If you plan to do this, just make sure that there’s no prepayment penalty for your online term loan.
For personal loans for business use, lenders don’t actually look into your business when determining whether or not to offer you a loan. Instead, they look at your personal finances and credit score to predict if you will pay back the loan even if your business doesn’t work out. Since they lend based on your personal ability to repay, the amount you can borrow is smaller, typically ranging from $2,000 to $35,000 with 3-5 year repayment terms. Propser and LendingClub are the most prominent online lenders for this type.
Business loans work just like regular small business loans from a bank. Lenders look into your business finances/credit score as well as personal finances/credit score to determine if they will offer you a loan. They do require the business to be more established — 2 years in business, $250K+ annual revenue, and profitable. The loan amounts they offer range from $20K to $500K with 1-5 year terms.
Approved term loan amount in 2016
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