Finding Small Business Loans Online is Easier Than You Think

Although there are many brick-and-mortar sources for loans for small businesses, modern technology has affected even the lending market. Small business loan sources can be found on the web using a number of methods.

A search engine is the most obvious place to search for small business loans online. All a user has to do is pull up his/her favorite search site and type "small business loans" into the search box. Upon hitting the button, a multitude of hits will appear, giving the user many choices to sort through. On one popular search engine, this method results in over twenty million pages containing those terms. Granted, not all of the resulting websites will be legitimate sources of funding, and some are surely articles pertaining to the subject, but in that listing of links are actual banks and other institutions that cater to small businesses by offering them low interest loans.

How does one tell if a source for small business loans online is legitimate? If the source is a bank with actual branches, that can help a great deal in establishing its legitimacy. Look for the FDIC notation on the site, as well as an indication that the establishment has some physical branches. A good track record is also important, so make sure that the bank has been around for a while before deciding to do business with it.

There are also many legitimate non-bank sources of small business loans online, many of which are affiliated with the Small Business Association (SBA), which is an independent agency of the federal government. One of the programs that the SBA has is called the 7(a) program, named after the section of the law that authorizes the agency to provide loans to U.S. based businesses. Under this program, private lenders underwrite loans to small businesses, and parts of these loans are guaranteed by the federal government against default. What this means is, if the borrower doesn't repay the loan, the SBA will step in and refund some of the lender's money. If a non-bank lending institution is affiliated with the federal government in this way, it is a safe bet that it is on the up-and-up. The SBA will have in its records information about the loans that have been provided by this lender in the past, so placing a call to the agency can be a good way to research the lender.

Thus, not only can one apply for a small business loan at a local bank, but there are many sources of money for small businesses available on the web as well. Whether through an actual bank or from a non-bank institution that is operating in conjunction with the federal government's Small Business Association, loans are being applied for online every day. By expanding the number of possible loan sources exponentially, a small business can be assured they are getting the best interest rate possible. And although the borrower should make sure to research the lending institution to ensure its legitimacy, applying for a loan online can be a quick and easy way for a small business to get the extra funds it needs.