Securing approval for a business loan can be daunting, especially for startups or those with less-than-ideal credit scores. Fortunately, there are some small-business loans that are easier to qualify for than others. While traditional lenders have strict requirements, online and alternative lenders offer quick access to capital, albeit at higher interest rates.
In this article, we will discuss the easiest business loans to get approved for and provide tips on selecting the right option for your specific needs.
What makes a business loan easy to get?
Traditional lenders like banks and credit unions typically require good credit, strong financials, and several years in business to qualify for a loan. These lenders have lengthy application processes and can take weeks to months to fund a loan.
On the other hand, the easiest business loans to get approved for usually have the following characteristics:
🤝 Flexible qualifications: These loans have lenient requirements for time in business, credit score, annual revenue, and collateral.
📝 Streamlined applications: These loans involve minimal paperwork and may utilize AI for underwriting.
🚀 Fast approval times: Lenders can approve and fund the loan within a day.
4 of the easiest business loans to get approved for
Online loans
Best for: Quick funding; borrowers with limited qualification for traditional loans.
Online lenders are nonbank entities that provide funding with flexible requirements. They offer simple applications and fast financing.
Quick approval and funding.
Less strict qualifications compared to traditional lenders.
Efficient online application process.
Various loan types available (e.g., term loans, lines of credit).
Higher interest rates than bank loans.
Lower maximum loan amounts.
Qualifications:
While requirements vary by lender, you may be eligible for an online loan with:
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Personal credit score: 570+.
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Time in business: 3+ months.
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Annual revenue: $30,000+.
Physical collateral is usually not required, but a personal guarantee and/or UCC lien may be requested by the lender.
Microloans
Best for: Underserved businesses; borrowers in need of $50,000 or less.
Microloans are small-dollar loans typically offering up to $50,000. They are provided by nonprofit or community lenders, including those involved in the SBA microloan program.
Lenders may prioritize underserved borrowers, such as minority groups or those located in low-income communities.
More flexible qualification requirements than bank loans.
Microlenders often provide business support and training services.
Small loan amounts may not be sufficient for certain funding needs.
Slower application and approval process than online lenders.