Online Business Loans

Online business loans provide quick, convenient, and accessible financing options for business owners.



This article contains general information and is not intended to provide information that is specific to American Express products and services.  Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.  

Whether you are launching a startup, trying to build a business during a slow cycle, or looking to facilitate positive cash flow, access to business funding is a crucial component for your enterprise to grow and thrive.


Traditional lenders are generally more conservative in their lending practices, limiting the options for small business owners to access funding. Fortunately, lending platforms may provide access to online loans and business credit lines that offer many benefits to small business owners.

What is an online business loan?

An online business loan is a type of business financing that you are able to apply for online from a desktop or mobile device. In many cases, these loans are also approved — and funded — online, without the need to deliver paper documents or meet with the lender in person.


While online loans and traditional loans both provide funds to small businesses, they have some key differences, including:

  • Pre-qualification: Online loans often offer a quick pre-qualification process that doesn't affect your credit and allows you to view rates and terms before you actually complete an application. Traditional loans don't usually offer the pre-qualification option.
  • Application process: Traditional, in-person loans often require you to visit a financial institution in person and meet face-to-face with a lending professional. You may need to bring paper copies of financial information, including tax returns and business financials, and complete a paper application. However, online loans allow you to complete an application online and upload any necessary documents.
  • Approval timeline: Traditional, brick-and-mortar lenders often take several days or longer to approve or deny a small business loan application. Online loans are known for faster approvals.
  • Funds disbursement: Once you're approved for an online business loan, the funds are usually expected to be available to you on the same day or within a few days. Traditional loans might take several days or longer to disburse funds.

Remember that each product is different, so you want to make sure you look out for the one with the features you care most about.

What are the benefits of getting loans online?

When you get a business loan, the main goal is to receive funding for your growing enterprise. Here are additional benefits of getting a business loan online:

Quick, online process

Online loans are usually available through an automated process, which might work well for small business owners' busy schedules. Business owners often seek funding to manage a cash flow crunch or take advantage of a timely opportunity — and they often are unable to afford to wait for the funds to become available.


Traditional, in-person loans often take days or weeks for approval, and several more days or weeks for funding. By contrast, online loans may be approved and funded in less time than traditional loans. For busy entrepreneurs, speed is one of the many valuable benefits of using an online business loan.

Prepare for unexpected expenses

Very often, the way businesses manage risk determines their success and longevity. But no matter how well you plan, surprises come up that might leave you strapped for resources.


For this reason, some businesses may turn to a business line of credit for their funding needs. Whether you face a natural disaster, loss of key staff or an anchor client, a difficult medical diagnosis, or another emergency, a business line of credit is a fast and flexible way to address the unexpected. You may draw from your line of credit when you need it, up to your approved credit limit, and you only pay interest on the amount you've borrowed.

Online lenders assess your business as a whole

When reviewing a loan application, traditional lenders might assess the business owner's personal credit history. They may also factor in the size of your staff and industry trends.


Online lending platforms, however, focus on the overall performance of the business when making a lending decision. Online lenders often review the applicant's real-time business data and tap into software tools that provide an accurate picture of the business and its financials. For example, an online lender may review a company's online sales (eBay, Etsy, or Amazon), banking transactions (PayPal), accounting data (QuickBooks or FreshBooks), shipping (UPS or FedEx), and dozens of other sources.


Business owners may be able to alleviate worries about sharing proprietary business information by choosing a lender with strict privacy and data security protocols.

A wide range of options for funding and repayment

Through online lending platforms, small business owners are usually able to select from a wide range of financing and varied repayment terms.


With a business line of credit or other online business loan, entrepreneurs may use the funds for any business needs. Online loans could offer a convenient tool to cover short-term expenses, such as:


  • Bridging the gap between accounts receivable and payable
  • Helping with short-term operational costs
  • Assisting with cash flow, inventory, or emergencies that may arise

Flexibility with how much you borrow and when

Some online lending platforms offer credit lines from which businesses may draw multiple times, repaying and drawing again, up to the total line amount. This is referred to as a revolving line of credit.


You may take the amount you need, when you need it, without reapplying each time. You get to choose how much you want to borrow because you only have to pay a fee on the amount withdrawn during the months when you have a balance.


A business line of credit is nothing new, but with online lending, applying for and funding a line of credit is more convenient and flexible than ever before.

Add to your company's credit history

Traditional lenders want to see proof that your company manages debt well. However, if your business never borrows money, it's tough to establish yourself as a good credit risk. When you get your first business loan, you don't just get necessary working capital; you also gain the opportunity to demonstrate that you know how to handle debt.


Once you establish a consistent history of making prompt payments and managing credit well, you could:


  • Become a more attractive customer for all kinds of lenders
  • Gain borrowing options and may see the cost of borrowing go down

How to get a loan online

Applying for an online business loan is a simple process, and because you don't have to meet with a lender in person, you could start the process at any time. Here are some steps to consider when applying:

1. Make sure you meet the minimum criteria to apply:

The lender's criteria could include time in business, credit score requirements, or average revenue. Be sure to check the requirements of each lender you are considering before applying, as minimum criteria often differ across lenders.

2. Gather your application materials: 

Make sure you have all the necessary information you'll need to apply for the loan, which likely includes personal information about the business owners (names, Social Security numbers, and addresses), basic information about the business (name, address, and tax identification number), and financial information about the business (such as profit and loss statements, tax returns, and bank account statements — or access to online tools that show this information such as QuickBooks).

3. Complete the application online:

Once you have all the information readily available, it may only take minutes to apply for an online business loan. Many online lenders require applicants to link a business bank account to the application rather than uploading multiple financial documents. This saves time when completing the application and allows the lender to quickly assess financial health.

4. Wait for news and funding:

Online lenders sometimes provide a response to a loan application within a few minutes to a few days. If your loan is approved, you'll get information about how to access the funds for which you qualify. In some cases, you may be able to access the funds on the same day you apply.

Approving online loans for small businesses

Waiting for approval of a loan application may sound stressful, but with online lenders, the experience is usually smoother compared to traditional lenders. Not only can online lenders often make lending decisions more quickly, but they also often take a more holistic view of a business' financial situation.


Online lenders look beyond just a credit score to assess the overall health of a business when reviewing an application. They review cash flow, as well as real- time business performance to assess credit risk and determine loan pricing.

Online loan FAQs

The material made available for you on this website is for informational purposes only and is not intended to provide legal, tax or financial advice.  If you have questions, please consult your own professional legal, tax and financial advisors.  


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