How to Find the Right Business Loan Online

Have you been searching for a business loan online, but you’re not sure how to find the perfect loan option for your needs?

Finding the right business loan online is easier said than done. Even if you have an idea of what you’re looking for in a loan, there are sure to be some challenges in finding what matches your needs; but if you’re not even sure what your needs are, you’re definitely going to struggle with finding the right loan.

When it comes to borrowing money, it’s important never to make a rash decision. If you’re convinced a loan is what you need to take your business to the next level, here are four steps you can take to find what you’re looking for online:

1. Know How Much You Need

The loan process begins with you figuring out exactly how much money you need and what it’s going to be used for. If you’re just starting your business, the average business startup costs around $30,000 in the United States, according to the Minority Business Development Agency; that said, you may need substantially more (or far less) depending on your industry.

It’s important to have a specific figure in mind before you start talking to lenders about your options, because it’s not uncommon to be approved for more than you actually need. In the heat of the moment, it can be tempting to think about all the things you could do with a little extra change — no need for that free logo maker now, you’re hiring a graphic designer! — but this can turn out to be a costly mistake. Know how much you need to get the job done, and don’t take on any more debt than you absolutely must to grow.

2. Compare Lenders

One of the biggest mistakes borrowers can make is to assume that all small business lenders are more or less the same. This is absolutely not the case; every lender has something unique to offer. Consumer Affairs offers a list of 10 best-rated business lenders, and while you don’t have to take their word for it, it’s worthwhile to explore what several similarly credible sources think about the lenders you’re considering.

3. Learn More About the Application Process

It would be nice if you could call or message a lender, tell them what you need in a loan, negotiate your terms and have your money wired to you all in the same day, but that’s unfortunately not the way things work. A business loan application can take some time, but you can expedite the process by knowing what documentation and application materials will be expected from you. This way, you can quickly provide the lender with everything they need to make a fast decision.

Fundera shares a six-step business loan application checklist, which offers a good idea of what to expect as you move through the process. This may not be a very fun part of the process, but you can make it short and sweet with a little prepwork and organization.

4. Be Realistic

Here’s an interesting stat shared by Behalf: “The median small business loan banks will give is $130,000-$140,000 and the highest they’ll give is about $250,000.” So if you were going into this process with the idea that you are going to secure a half-million dollar loan, you may need to go back and crunch some more numbers.

You need to be realistic about the amount of money you need, as this puts you in position to find a lender that’s willing and able to do business with you and can drive more favorable lending terms. Even if you’ve got the next big idea — like Juul flavored e-cigarettes — remember that you’re not pitching to investors. You’re taking on debt. One of the biggest mistakes you can make when searching for a business loan online is to set unrealistic expectations.

Final Thoughts

Finding the right business loan online is easier than ever before. There is plenty of information to read through, with plenty of advice available to point you in the right direction. So rather than spending your day watching People You May Know and browsing Facebook, begin your search for more business loan information. Informing yourself about your options now could save you a bundle when you obtain financing.

Have you worked through the process of securing a business loan online? Were there any specific factors that guided your decision-making process? Share your experiences in the comments.