Everything You Need to Know About LendingTree Business Loans
With so many options for business loans out there, don’t you wish there was one service that could go on the hunt for you?
Luckily, LendingTree offers just that. If you’re looking for a business loan, LendingTree is a one-stop shop to explore almost every loan option you qualify for.
What does that mean exactly? And what else should you know about getting a LendingTree business loans?
We’ll cover all of that and more below.
What is a LendingTree Business Loan?
First, it’s important to understand how LendingTree services and LendingTree business loans work.
LendingTree is a leading online loan marketplace with one of the largest networks of lenders in the nation. It’s a service that provides consumers a way to connect with multiple lenders for a number of financial borrowing needs, including business loans.
Anyone looking for a loan can fill out one simple online form and then shop, compare, and save on the loans they need.
So, while LendingTree is not itself a lender, they do provide a service to help you procure business loans.
LendingTree can connect you with almost any kind of business loan you could want. But where does one start?
What Types of LendingTree Business Loans are There?
Businesses today have the unique advantage of a business funding landscape that is now more varied and accessible than ever before. There are different types of business loans available to meet nearly every distinct need.
LendingTree’s job is to find a loan that works for your needs and qualifications.
This means they work across the wide landscape of today’s loan offerings. Of the many types of business loans LendingTree works with, these are the main types.
By guaranteeing a portion of the loan in case of default, the SBA takes out some of the risk for the lender, making it easier for banks can lend to small businesses.
SBA Loans have the lowest rates and longest terms available on the market and are one of the most popular products as a result.
They are also some of the toughest to qualify for and can take much longer to get approved.
Short-term loans are a traditional loan to fund timely business needs and opportunities. Short term loans typically last from a few months to a year or more.
This type of business loan is typically more accessible to small businesses than long term loans because they are often of less value with shorter borrowing periods.
Business owners can secure a short-term loan in as little as 1 day, but it comes with a price tag.
Short-term loans usually have higher interest rates than other products.
Long-term loans are what people typically think of when they think of a loan.
This traditional loan product can be used to finance a variety of business purposes, especially high-dollar investments like franchising.
Terms can last up to 10 or 20 years depending on the business’ needs. They’ll have lower interest rates as a result and may be tougher to qualify for.
Business Line of Credit
A business line of credit works a lot like a credit card.
You get a set sum of cash that can be drawn upon as needed, known as a credit line.
Funds can be used for any business purpose, including long-term investments or short-term needs.
Whatever a business takes out is paid back on a set schedule with interest.
Unlike a term loan, you only pay interest on the amount you take out, rather than a lump sum.
Business lines of credit can be procured in as little as 1 to a few days, and have higher interest rates than term loans.
Working Capital Loans
This is a type of short term loan for the purpose of funding a company’s day-to-day operations during a time of reduced activity.
When the lull is over and business is booming again, the company can repay the business loan—with interest.
Working capital loans have some of the highest interest rates on the market, but it could be the cash you need to keep your business afloat.
Have equipment you need to buy?
Equipment financing is a loan that covers the cost of expensive equipment—using the equipment purchased as collateral.
Interest rates for equipment financing vary, depending on the business’s qualifications, but you can usually receive the financing you need fairly quickly.
Accounts Receivable Financing
If your business has a ton of unpaid invoices holding you back, this could be a good option for you.
Accounts receivable financing gives a business immediate cash for existing unpaid invoices. The loan is paid back upon receipt of the paid invoice, with the lender taking out a fee based on the amount of the invoice/loan.
This is a good option for businesses with unpaid invoices—even with bad credit or a relatively short business history. Your invoices essentially act as collateral for the loan.
There are a several variables to consider when determining the right business loan for your company. Pursuing a loan should be a strategic part of your business plan.
How Do You Apply for LendingTree Business Loans?
It’s pretty simple.
- Fill out this online form.
- LendingTree will ask you a series of questions and review the information you provide.
- Based on your answers, LendingTree will connect you with multiple lenders who can provide several custom loan offers based on your credit profile. Qualified applicants can receive up to five offers in a matter of minutes.
- Pick the best deal for you and with a real, live customer service representative will work with you to help finalize the details.
This process is entirely free. However, do remember that if you decide to take out a loan you will be responsible for any processing fees, closing costs, or other fees required by the lender.
The good news is that LendingTree will let you evaluate your loan options with no impact to your credit score.
So, what’s in it for LendingTree?
Lenders pay LendingTree for the chance to compete for your business. They then pass your profile to up to multiple lenders who then provide you a custom loan offer based on your request.
What Do I Need to Prepare to Apply for a Business Loan Through LendingTree?
Though the application process is fairly simple, there’s much to consider before going full steam ahead.
Business owners should follow these steps before they begin the process of applying for LendingTree business loans.
- What’s your debt-to-equity ratio?
- How much have the business owners invested in the business?
- How much working capital does the business have?
- What’s your cash flow projection? Based on a monthly report that illustrates when money is collected, when cash goes out, and what’s left.
- What’s the rate of customer debt recovery on products or services?
- What’s the business’s debt repayment history?
- What’s the rate for delivering products or services to customers?
- Two years of personal and business tax returns
- Legal Filings related to ownership
- Recent profit and loss statement
- Information on existing debts
- Past bank statements
- Recent balance sheet
- Business license
- Business plan
Determine what you need a business loan for
With so many business loan options available, it’s important to narrow down what, specifically, you will use loan money for.
Are you trying to satisfy a short-term need?
Do you need to purchase expensive equipment?
Some loan options work better for different needs, even if they aren’t typically the most desirable. For example, you don’t necessarily want to be paying off a 10 year loan for a piece of equipment that only lasts 2 years.
You should determine exactly how much your business needs to borrow to achieve its goals. This should be a precise figure, not a range.
Comb through the loan options available to see what might be a good fit for your needs.
Calculate a loan payment that works for your business
One of the most important things to determine before applying for a business loan is how much you can afford to pay back on a monthly, weekly, or daily basis, depending on the loan type.
You absolutely do not want to default on your loan. The damage can be irrevocable to a business and its credit history, which will impact its future funding capabilities.
It’s important not to be too ambitious when making this calculation—definitely err on the side of caution.
To do this, you’ll want to calculate the business’s earning potential compared to what it costs to run the business and how much the loan will cost.
You’ll want to consider the following:
Use a loan calculator to help you see how altering certain variables can modify your monthly payment. Play around until you find the mix that’s right for you.
You’ll want to keep your desired loan amount and your desired payment plan top of mind throughout the application process so that you can make sure you get exactly what you need when working with lenders.
Check your creditworthiness
Your business’s creditworthiness will determine the type of loan you can qualify for.
Creditworthiness is determined by a variety of factors, including your ability to pay off debts in a timely fashion, your debt-to-equity ratio, among other things .
You can view their credit score at LendingTree for free.
Borrowers should expect to have good credit to qualify for most business loans—though bad credit shouldn’t stop you from seeking funding.
Lenders build an assessment of the applicant’s character by evaluating how they handled debt in the past.
If you’re not in a hurry for cash, it may be worthwhile to work on your credit score so that you can secure a better loan or interest rate when the time comes.
Take inventory on assets that can be used as collateral
Collateral is an additional source of money that can be legally seized by lending companies if the borrower is unable to pay off their loan.
Assets used for collateral on business loans can include company buildings, equipment, and accounts receivable. Lenders will work with you on what collateral works for them to cover the loan.
Just make sure you know what your signing. It’s much better to put up assets for collateral upfront (a secured loan) rather than let the lender decide later what they will seize down the line should you default on payments (an unsecured loan).
Many lenders require personal guarantees from business owners in the event the business’s collateral does not come through. Work with an attorney or business lending specialist to come up with collateral agreements that work for you.
Get your paperwork in order
Once you determine that your business can handle taking on a loan, start getting the necessary documentation needed for your loan application together for lenders.
The exact paperwork differs across lenders, but most usually ask for the following documents:
An important part of the application process is getting the lender to believe you and your business are able to manage the responsibility of a business loan. Your presentation of the proper documentation will make a big difference in your chances for approval.
Be careful that all of your information is up-to-date and accurate. You don’t want to miss out on a loan you would otherwise qualify for because of a miscalculated financial projection or sloppy business plan.
Work on gathering as much information as you can for the loan application process—it may seem arduous, but it will be worth it in the end.
Can I Apply for LendingTree Business Loans with Bad Credit?
This is a very reasonable question. The answer is yes—LendingTree will match you with a lender based on your credit qualifications, even if your credit is poor.
When is the Right Time to Apply for LendingTree Business Loans?
Since LendingTree mostly works with online lenders for business loans, it’s best to work with them after you’ve exhausted resources through traditional lenders, such as banks, who will have lower interest rates and more secure lending options.
Which Business Lenders Work with LendingTree for Business Loans?
One of the features LendingTree offers is a site for customer reviews of their lenders. This is a good starting place to see which lenders LendingTree works with and which might be the best options for you.
What Other Services Does LendingTree Offer?
In addition to lender ratings and reviews, LendingTree also offers a variety of informational resources and tools to help borrowers manage their finances and have an informed experience.
These resources include:
These tools are available to business owners seeking financing to help them make informed decisions about the loans they desire.
You can make use of even more features by creating a My LendingTree account.
Borrowers with a My LendingTree account can:
- Track their credit score, updated monthly with insights into which factors are negatively impacting their score.
- Review all loan and credit card accounts.
- Get notified when LendingTree identifies a savings opportunity based on real-time loan offer data.
All of these services are completely free to use.
The Bottom Line on LendingTree Business Loans
LendingTree is a great tool to use to cipher through all the online loan options available to small business owners today.
The service is relatively easy to use and offers many additional features for customers.
However, they may not have the best-of-the-best products on the market or offer more traditional financing services through a bank.
But if your business can’t find financing elsewhere, LendingTree is a great place to look for online business loans.