Qualifying for a small business loan is becoming easier than you may think thanks to a bevy of online lenders and other options for quick business financing.


Every small business owner has found themselves in a situation in which they’re running low on cash in the face of a big, unexpected expense or opportunity. If you don’t have reliable access to capital, that could mean not being able to fulfill a large order from a customer, coming up short on payroll, or even having to shut down temporarily while you figure out a way to cover the costs of a major equipment repair. 

Scenarios like these often lead business owners to seek financing from a traditional lender, which can be a challenging prospect. Traditional lenders have not always been eager to lend to small businesses, which they often deem too risky. The good news is that entrepreneurs now have more options than ever to lock in the business financing they need.

Increasing Approval Rates for Small Business Loans

Approval rates for small businesses applying for a loan, line of credit, or cash advance have been increasing steadily in recent years, thanks primarily to online lending companies. Fintech payment platforms are also giving small businesses financial flexibility in other ways, including making it easy to use your credit card to make all kinds of payments.

If lending trends in recent years continue, small businesses can expect fewer hurdles to business financing in 2020. Consider that 60% of entrepreneurs who applied for a small business loan in 2018 were approved, according to the Federal Reserve’s 2019 Small Business Credit Survey. That followed approval rates of 59% and 57% in 2017 and 2018, respectively.  

Are you preparing to line up business financing this year? Here are some of the growing options small business owners have to land the capital they need. 

Business Financing from Alternative Lenders   

Online lending companies are an increasing source of credit for small businesses. These alternative lenders use cash flow data available even on start-up businesses when gauging a company’s creditworthiness. This approach allows them not only to process applications faster, but also to green-light more financing for smaller firms.

The Federal Reserve reported that small business owners who sought financing from online lenders in 2018 enjoyed an approval rate of 82%, up from 75% in 2017 and 69% in 2016. In contrast, small businesses that applied for a loan elsewhere were less likely to get their financing needs met. The loan approval rate for firms who went to a small bank was 71% in 2018. At larger banks, it was 58%.  

Alternative lenders are also more likely to qualify small businesses with less than sterling credit for a loan. The Fed survey found that online lenders’ approval rate for small firms deemed to be a medium or high credit risk was 76%.  This is compared to just 47% at small banks and 34% at large banks.

Why are online lenders more likely to approve your small business loan? They often look beyond collateral when sizing up their applicants’ creditworthiness and instead focus on a company’s monthly cash flow. Plus, they may only need to look over as little as three months of bank transactions, whereas a traditional lender generally weighs at least one or two years of a company’s cash flow history.

Banks Are Teaming Up with Online Lenders  

Of course, traditional financial institutions remain a potential source of capital for small businesses. And online lenders’ aggressive push to provide financing for small businesses has led forward-thinking banks and credit unions to team up with their Fintech-powered rivals.

In these partnerships, banks benefit from the loan underwriting platforms used by alternative lenders to quickly generate a more comprehensive and informed risk profile of the borrower. This arrangement helps banks clear some of the obstacles that they’ve faced when extending small business loans, including documentation, compliance, cost and underwriting. And it speeds up the application process for borrowers and expedites the process of qualifying for a business loan, overall.       

Cash In on Credit Flexibility

Another way for your business to expand its financing options in 2020 is to use the credit you already have. Typically, the use of credit cards is limited to transactions with merchants who carry the card transaction processing systems popularized by Visa and MasterCard. Let’s say you want to use your credit card to pay a bill.  However, this merchant doesn’t accept credit cards.  That line of credit may as well not be available to you.  

However, FINSYNC’s Payments Platform makes it possible to utilize your credit cards to pay any kind of bill, whether it’s your rent, utilities, even another credit card. The FINSYNC platform allows you to make payments using only the recipient’s email address.  This eliminates the need for sharing your credit card account numbers or other sensitive information. Because the transaction is digital, it’s processed right away and leaves a handy data trail as a record.  This makes it easy to tabulate your expenses when it’s time to file taxes.  

Qualifying for a Business Loan in 2020 is Easier than Ever Before

Every business can use a financial leg up. Don’t wait to discover the many options you now have available to get the funding you need. If your business could use some extra capital, consider applying for a loan through the FINSYNC Lending Network. Apply once in a matter of minutes, then choose among the best options from a variety of lenders.