Since they debuted into the lending land in 2005, online lenders have become a reputable source of small business loans to business owners everywhere. Unlike banks that entangle upcoming entrepreneurs with paper-laden application processes and lengthy approval periods, fintech lenders employ cutting-edge tech and AI-based tools to offer better, faster financial services to businesses and individuals.
They also have fewer requirements compared to banks. It isn’t rare for business owners turned away by banks to obtain small business loans at favorable terms from a fintech lender.
But not all online lenders are genuine and trustworthy. Dark masters of the web exist that prey on desperate business owners that need cash quickly. And believe it, when you need money within a short call to cover a cash crunch or buy inventory, it’s possible to fall victim to an online scam.
That’s the point of this article. We’ll give a list of trustworthy online financing tools so that you know where to go when you need working capital to keep the ball rolling.
Peer-to-peer lending is a great online financing tool. Trustworthy P2P lenders that connect borrowers to investors include Peerform, Upstart, Prosper, Funding Circle, and Payoff. Different websites set their own rates and loan requirements. Once you qualify, your loan request is put on the site where investors come out to finance your loan.
However, most P2P lending platforms, except Funding Circle, offer personal loans up to $50,000, which may not be enough to cover business expenses.
Crowdfunding is another trustworthy online financing tool for startups with great business ideas that can amaze the masses. Crowdfunding sites allow you to pitch your business idea to potential backers who then come out to give small donations to help you meet your funding goal.
Trustworthy crowdfunding sites include Kickstarter, IndieGoGo, SeedInvest Technology, GoFundMe, StartEngine, among others. For instance, Indiegogo has helped fund more than 800,000 business ideas since its launch in 2008, while SeedInvest has helped more than 235 startups raise over $300 million in seed capital.
While there are many fintech lenders out there, Camino Financial has proved to be a leader in the online lending landscape. Founded by two brothers whose mother lost her business when they were growing up, Camino vows to ensure that no business is left behind.
The fintech lender focuses on providing small business loans to help minority businesses find the working capital they need to grow and succeed. They offer simple and affordable loans to business owners who find it hard to obtain financing from traditional owners of capital.
Here’s what makes Camino Financial a trustworthy online lender:
- Transparency: Camino Financial is transparent to clients from the word go. They offer a loan calculator to determine your loan costs and repayments before you go in.
- Simple pre-approval: Once you determine your costs, you can submit a simple pre-approval application to know where you stand within 24 hours.
- Wide loan amounts: Eligible loan amounts range from $4,000 to 400,000 thousand. That’s a good range to accommodate all your business needs.
- Flexible repayment terms: Loan terms range from 24 to 60 months. Monthly interest rates vary from 1.0% to 2.5% with no prepayment penalties or hidden fees.
- Minimum requirements: You only need 9 months into business, $2,500 monthly revenue, and a $550 FICO score.
- Faster funding: Once you pre-qualify and accept Camino’s loan offer, money will be in your account within 2 business days.
Whether you choose fintech lenders, P2P sites, or crowdfunding, it’s vital to make sure that you don’t fall into the wrong hands. Here’s how you tell apart trustworthy online financing tools from the scams:
- Transparency: Work with lenders who provide loan calculators and a simple pre-approval process.
- Registration: Make sure the lender is registered with the state’s Attorney-general.
- Better Business Bureau website: Trustworthy lenders have good accolades on the BBB website.
- Secure websites: Trustworthy lenders have genuine, secure websites.
- Genuine offers: Avoid lenders who offer too-good-to-be-true loan terms and ask you to cover fees out of pocket.
There you have it! These are the three major trustworthy online business financing tools you can use to raise capital for your startup. Only work with lenders that meet the above eligibility criteria. Follow the link above to obtain a small business loan in five simple steps from a genuine fintech lender.