small business owners often face an additional need of money and found that the long process of taking a loan from a traditional bank does not fit into their schedule . The loan alternative market that has emerged online in recent years, is intended to provide another option for those who want to stand out the big banks or that would not qualify for a traditional loan in the first place. These services offer fast online applications, instant quotes and competitive rates. Whether you're looking to buy inventory, additional staff or buying equipment, a small business loan from one of these lenders may be a wise choice. However, not all lenders are created equal, and it is important to be sure that you are borrowing from a reliable source that will suit your business specific needs. That's why we rounded the higher direct lending services for established businesses and those who are just getting on their feet.
Best for established businesses
If you have been in business for over a year, you may qualify for a loan by a number of large direct lenders. Wondering what is worth your time?
Lending Club
Taking his famous model peer-to-peer for personal loans on the commercial side, Lending Club offers competitive rates almost every type of business. Borrowers can apply for amounts between $ 15,000 and $ 300,000 and will receive a fixed APR ranging from 5.9% to 25.9%, which is based on a number of factors, including the owner of the credit, the business' financial strength and the amount requested. Lending Club offers a quick intuitive application process with the ability to check your rate in minutes without affecting your credit. Its customer service is excellent, and its website is one of the more that we met with in-depth FAQ section that covers almost every aspect of the loan process easy.
Keep in mind, you must have been in business for a minimum of two years and to make an annual income of at least $ 75,000 to qualify for a small business loan through loans Club . It also may not make loans to businesses in Iowa, Idaho, Maine, North Dakota or Rhode Island. Not sure that your business will qualify? Do not worry, as Lending Club also offers personal loans with such competitive rates that can be used for commercial purposes.
StreetShares
If you are looking for a small business loan that feels like it could be coming from a company depending on your local Main Street, look no further than StreetShares. This direct lender peer-to-peer focuses on obtaining loans to small business owners who may not be able to get a loan elsewhere in the current economic climate, specializing in loans to veterans and spouses. Although StreetShares is not the only direct loan service using the model peer-to-peer, it adds a unique spin leaving borrowers create what he calls a "Business Pitch" to apply for loans in amounts ranging from $ 1,000 to $ 50,000. This business pitch is presented to investors, who then compete with each other auctions styles to fund your loan. StreetShares also supports a portion of each loan.
To qualify for a loan StreetShares, your company must be at least one year and have a minimum annual turnover of $ 25,000. Although he works to be available in all 50 states at the time StreetShares can not lend to businesses in Montana, New York, North Dakota, Rhode Island, South Dakota and Wyoming. As investors are competing to offer the lowest APR, your rate may vary, although the service indicates that its average range from single digits to low twenties.
Best for new businesses
If your business is less than one year or has not been started, you can always rely on a direct lender for the money you need to make it move in the right direction. Keep in mind, a personal loan is different from a business loan in that the borrower will be on the hook in case of problems with repayment occur -. Not the case
Prosper
The personal loan service adds an exclusive touch to the loan system peer-to-peer using what he calls a "Prosper Rating" to determine the rate of each borrower. This score is calculated not only your credit, but the number of inquiries on your credit reports over time, the number of overdue accounts you have, the use of credit cards, the debt-income ratio and, where applicable, the performance of your payment on the past Prosper loans. Borrowers can apply for loans in amounts from $ 2,000 to $ 35,000, and APRs range from 5.99% to 36%. These APRs are determined by your Prosper Rating.
As StreetShares Prosper makes the personal loan process by enabling borrowers to create a list that explains what they need the money and let investors see the human behind the demand for silver. Also, you can ask friends and family members to invest small amounts of money to help improve your credibility with investors. Loan applications have a lifespan of 14 days, during which your loan can receive a full or partial funding. If you receive full funding before 14 days is up, the list closes; if you reach 14 days without full funding, you can choose to try again or accept the partial funding - as you have received 70% or more of your requested amount. The flexibility of this offer to borrowers is definitely a plus.
Upstart
Another out-of-box direct loan service that offers personal loans for business use, Upstart not only evaluates the financial history and employment applicants, but will also focus on academic performance. This option is available for those who request within four years of university, so if you've been in school five years or more, this aspect of Upstart will not be much help. However, for young entrepreneurs who may be lacking as regards employment or credit history, it can be a great opportunity to get a loan if necessary to their business.
Upstart allows borrowers to apply for amounts between $ 3,000 and $ 35,000 and offer APRs of 5.67% to 29.99%. Loan applications are assigned a rating from AAA to D, with AAA being reserved for the most qualified candidates. This rank determines your rates and how much you will be approved to borrow. Upstart is not a direct lender peer-to-peer, so once you have completed the application process and were approved your loan funds will be instantly deposited into your bank account.
These services are only the top of our list when it comes to lending to small businesses directly. To read all our reviews and see a comparison of apples to apples of these services and others, visit our small section of business loans.