Compare business loan marketplaces

Running a business is more than a full-time job. When you’re just starting out or short on resources, chances are you simply don’t have the time to find financing on your own, even if you need it. This is where business loan marketplaces can help. They cut down on the time it takes to find a lender that meets your needs while providing resources to help you along the way. Read more to learn if business loan marketplaces can help your business.

What is a business loan marketplace?

A business loan marketplace is a service that can connect you with multiple lenders after filling out a basic application, usually online. The main function of a business loan marketplace is to reduce the amount of time it takes to find a lender that meets your business’s needs. On top of that, many offer resources to help first-time business loan borrowers navigate the lending process.

Using a marketplace to find a lender is usually free for borrowers, though some charge a service fee.

How do business loan marketplaces work?

Business loan marketplaces work a lot like online direct lenders at first glance. You typically have to fill out a brief application with basic information about your personal and business finances. But instead of getting one loan offer, you’ll receive several from different lenders. Some marketplaces show all your options at once. Some give your contact information to their partners, who in turn reach out to you. Others do a combination of the two.

Some business loan marketplaces are more involved than others. While many free services stop after you choose a lender, some paid services will continue to help you with your application and even pull strings with their partner lenders to make your application go through as quickly and smoothly as possible.

Business loan marketplaces are great for speeding up the amount of time it takes to find a lender or get assistance. However, you’ll always be limited to their network of partners and might not find the absolute best loan out there for your business needs. This is particularly true with free online marketplaces, which often use a pay-per-lead business model and make their money from the number of potential borrowers they bring to a lender. These might not have your best interest in mind.

Should I consider applying through a marketplace for my business loan?

You might want to apply for a loan through a business loan marketplace if:

• You’re short on time. Marketplaces can cut down on the time it takes to find a lender that’s right for you without having to settle on the first one you find.
• You’re not sure where to start. Many marketplaces offer resources and guidance for customers who haven’t taken out a business loan before.
• You’ve been rejected before. If you’ve been rejected after applying for a loan more than once, you might have better luck if your selection is filtered to lenders with eligibility requirements you can meet.
• You want to explore unfamiliar options. Most offer a wide range of loans and can connect you with financing you didn’t know your business could qualify for.

However, there are a few potential drawbacks you should be aware of too:

• Not giving you every option. True, some marketplaces have wide networks, but you won’t be able to compare absolutely every financing option out there.
• Not prioritizing your needs. The pay-per-lead model many marketplaces use means it’s in their financial interest to keep lenders satisfied, not you.
• Not protecting your contact information. While using a marketplace doesn’t necessarily increase your risk of identity theft, you might end up fielding calls and emails from multiple lenders, even after you take out a loan.

Business loan marketplace vs. direct lender

Application process

Applying with a business loan marketplace: Fill out an application, get offers from several lenders and then continue with application through direct lender.

Applying with a direct lender: Fill out application to prequalify if possible, then review the offer, submit documents and additional information before signing loan documents if approved.

Fees

There’s usually no application fee to worry about. The cost of business loans might include origination fees, prepayment fees, late payment fees and more.

Sharing of information

Check the fine print to find out whether the marketplace or lender will share your information with third parties for marketing purposes.

Business loan marketplace vs. peer-to-peer lending platform

Marketplaces are connection services that tend to have many more loan options and don’t set the rates, fees or terms of loans. They’re a stepping stone to direct lenders, while peer-to-peer lenders are one-stop shops.

Despite these differences, it’s not uncommon to hear the terms peer-to-peer and marketplace lending used interchangeably. Some peer-to-peer lenders even refer to themselves as “peer-to-peer marketplaces.”

If you’re not sure which one you’re dealing with, you can usually get a clue from the way it works. If it mentions connecting you with investors, you’re probably looking at a peer-to-peer lender. If it mentions connecting with lenders, it’s likely you’re looking at a business loan marketplace.

Compare alternatives to business loan marketplaces

If you want to go directly to a lender instead, compare business loan providers from these online lenders below.

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Product CAFBL	APR Range	Loan Amount	Loan Term	Minimum Revenue	Minimum Time in Business	Loans Offered	Broker Compliance
Journey Capital Business Loan	8% – 29%	$5,000 - $300,000	4 - 24 months	$100,000/year	6+ months	Term Loan, Line of Credit, Merchant Cash Advance		To be eligible, you must have been in business for at least 6 months with a minimum annual gross revenue of $100,000. Journey Capital offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.	Go to siteMore Info Compare	loading Fetching your data...
Merchant Growth Business Loan	12.99% – 39.99%	$5,000 – $800,000	6 – 24 months	$10,000 /month	6 months	Unsecured Term, Line of Credit, Merchant Cash Advance		To be eligible, you must have been in business for at least 6 months and have a minimum of $10,000 in monthly sales. Merchant Growth offers financing tailored to business needs. It specializes in providing capital based on future cash flows, but it also offers fixed solutions. Fill out an application within 5 minutes and get your funds within 24 hours.	Go to siteMore Info Compare	loading Fetching your data...
Loans Canada Business Loan	6.99% - 46.96%	$500 - $500,000	3 - 60 months	over $10,000/month	9 months	Unsecured Term	Loans Canada is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.	To be eligible, you must have been in business for at least 100 days, have a Canadian business bank account and show a minimum of $10,000 in monthly deposits ($120,000/year). Loans Canada connects Canadian small business owners to lenders offering financing up to $500,000. Complete one simple online application and get matched with your loan options.	Go to siteMore Info Compare	loading Fetching your data...

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Bottom line

Business loan marketplaces could be a great resource if you don’t have the time to compare lenders on your own or need help with the application process. But be aware that you’re restricted to their networks of lenders and they might not always have your best interest in mind when it comes to their bottom line. You also might have to field calls from lenders even after you’ve signed off on a loan.

Not sure if a marketplace is right for you? Check out our guide to business loans to learn about your other options.

Frequently asked questions

• How do I repay a loan I got through a business loan marketplace?

  You repay your loan directly through your lender. Typically, your relationship with a business loan marketplace ends either after you've found a lender or after your funds are disbursed.

• Are business loan marketplaces startup friendly?

  Some are. Look for a marketplace with a startup program or one that mentions funding new businesses.

• Can I use a business loan marketplace if I have bad credit?

  You can, though you might have difficulty being matched with a lender or you may only get accepted with high interest rates. If you're having trouble qualifying for a loan, take some time to focus on growing your business and improving your personal credit score before applying again.

• Is a business loan marketplace the same as a broker?

  No. Business loan brokers are professionals hired to present your application to lenders and find you financing. You may have to pay a business loan broker a percentage of the financing you receive, but some brokers don't charge fees to borrowers.

Written by

Anna Serio

Editor

Anna Serio was a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY. See full bio

Anna's expertise

Anna has written 61 Finder guides across topics including:

• Personal, business, student and car loans
• Building credit
• Paying off debt