What Is an Online Business Loan?

Online business loans are debt financing options that allow business owners to secure financing while avoiding a visit to a brick-and-mortar bank. Applying for business loans online is a convenient, accessible, and secure option for business owners—and more and more online business loan options are cropping up to address rising demand.

The best online loans available to small businesses are:

  1. SBA loans: Best for established, profitable small businesses
  2. Term loans: Best for established business owners with strong credit scores
  3. Short-term loans: Best for one-off business investments
  4. Business lines of credit: Best for business owners who need flexible access to working capital
  5. Equipment financing: Best for business owners who need to finance equipment
  6. Invoice financing: Best for business owners with unpaid invoices
  7. Merchant cash advances: Best for business owners with poor credit

This guide to the seven best online business loans will cover the most important details, along with all of the pros and cons of each loan option. We’ll also walk you through best practices to follow if you do decide to apply for a business loan online.

See Your Business Loan Options

7 Types of Online Small Business Loans


SBA Loans

Five to 25 years
3.72% to 13%
Up to $5 million
As little as 30 days

Traditional Term Loans

One to five years
Between 7% and 30%
$25,000 to $500,000
As little as two days

Short-Term Loans

Three to 18 months
Starting at 10%
$2,500 to $250,000
As little as two days

Business Lines of Credit

Six months to five years
7% to 25%
$10,000 to over $1 million
As little as two days

Equipment Financing

Expected lifetime of the equipment
8% to 30%
Up to 100% of the equipment value
As little as two days

Invoice Financing

When the customer pays the invoice, you receive the reserve amount, minus fees
About 3% + 1% every week the invoice is outstanding
About 50% to 90% of the total invoice amount
As little as one day

Merchant Cash Advances

Automatically deducted each day through your merchant account
Factor fee of 1.14 to 1.48
$2,500 to $250,000
As little as one day

If you’re considering using an online business loan to meet your funding needs, you’ve already taken a great first step. But how do you choose one of the many small business loans that are available online?

Not every business loan will meet your needs, or be right for your specific business’s qualifications. You might have to do a bit of shopping to find the perfect fit.