What Is a Business Lending Marketplace — and Should You Use One?

Re suggests that Comparing multiple loan offers is key to finding the best deal for your — but applying to several lenders individually can be tedious and time-consuming

Conversely, A lending marketplace lines the cess by allowing you to submit a single application and compare multiple small- loan options in one place (an important development)

How much do you need (fascinating analysis)

Meanwhile, See Your Loan Optionswith Fundera by NerdWalletWe’ll start with a brief questionnaire to better understand the unique needs of your (this bears monitoring)

Once we uncover your personalized matches, our team will consult you on the cess moving forward

How does a lending marketplace work, considering recent developments

A lending marketplace is an online platform that lets you compare loan offers from multiple lenders through one application

Although the borrower experience can vary from platform to platform, here’s how it generally works:You submit an application, amid market uncertainty

You complete a simple application by answering basic questions your and the type of funding you need

At Fundera by NerdWallet, for example, you’ll answer:How much money you need

When you started your

Your average monthly revenue

On the other hand, How you’ll use your loan (remarkable data)

On the other hand, Your zip code

On the other hand, Your phone number, given the current landscape

On the other hand, However, When you submit your application, the marketplace will ly perform a soft pull on your credit (which doesn’t impact your score) to determine which loan options you prequalify for

Nevertheless, You receive loan matches

On the other hand, The data indicates that lending marketplace will match you with a range of loan options from its partner network based on the information you vided

These matches may come from banks, SBA or online lenders, considering recent developments

Additionally, You may see different ducts such as term loans, lines of credit, equipment financing, SBA loans or merchant cash advances. 😎 Nerdy TipYour matches will be limited based on the partners the marketplace works with

If, for example, the marketplace doesn’t work with any invoice factoring companies, you won’t see invoice factoring as an option, given the current landscape

You compare the offers you receive

You’ll be able to see the loans that you prequalify for and review potential loan amounts, repayment terms and interest rates

Depending on the marketplace platform, you may have access to a dedicated representative who will walk you through the options and help you decide what’s best for your

You choose the right duct for your needs

Additionally, If you find a duct that’s right for your, you can move forward with that offer

At this point, you’ll ly have to vide additional information to submit a formal application with your chosen lender

As part of this cess, the lender may perform a hard inquiry on your credit — but you’ll be notified before this happens

Keep in mind that you don’t have to move forward with a duct if you don’t find one that’s right for you (an important development)

You’re always free to explore other options, whether through another marketplace or a direct lender

You receive and sign your loan agreement, in this volatile climate

Furthermore, Vided that your supporting documentation is consistent with your original application, you should receive final apval from the lender quickly (an important development)

Once you’re apved, you’ll receive a loan agreement to review and sign

The loan agreement will outline your terms and conditions, including the loan amount, repayment terms, interest rates and any additional fees

If you have any questions the agreement, you can ask your dedicated representative (if you have one) or your lender directly

Your funds are disbursed and you begin repayment

At the same time, After you’ve signed your loan agreement, the lender will disburse your funds to your bank account

This cess may take anywhere from a few hours to a few days depending on the lender and your bank (which is quite significant)

Nevertheless, Then, you’ll repay your lender based on the agreed upon schedule (an important development)

Nevertheless, It’s important to note that the funds will come from your small- lender and you’ll repay them directly

Lending marketplaces don’t vide funds themselves or handle repayments

Lending marketplaces vs

Direct lenders lending marketplaces serve as a matchmaker between borrowers and lenders, whereas individual lenders work directly with borrowers themselves

Here’s a summary of their differences: lending marketplaceDirect lenderAllows borrowers to prequalify for multiple loan offers at once

Vides a single offer based on its available loan ducts

However, Can compare several options using one platform (an important development)

However, Requires multiple applications to compare offers

Focuses on a fast and simple application cess

On the other hand, Application and underwriting cess specific to the lender; may be slow and time-consuming if a traditional lender (e, considering recent developments

On the other hand, Bank or credit union)

Doesn’t vide funding directly or take payments from borrowers (noteworthy indeed)

Issues funding to borrowers and receives repayments

Makes money from fees and/or commissions when borrowers take out a loan from its lending partners (fascinating analysis)

Meanwhile, Makes money through interest and fees charged on loans they vide, given the current landscape

On the other hand, » MORE: Use this script to talk to a loan brokers and cons of using a lending marketplacesReceive multiple loan offers through a single application

Information from several lenders is available in one place — making it easier to compare options

May have access to a dedicated lending representative who can offer personalized support

Funding is usually available quickly, faster than traditional lenders

New es and/or borrowers with bad credit may be able to get a loan more easily than applying with a traditional lender

ConsOnly lending partners of the marketplace may be included in options; banks often do not participate, in today's financial world

On the other hand, Sharing sensitive information could lead to -up calls or third-party data sharing, depending on the platform

Nevertheless, Interest rates may be higher than traditional lenders or going through a lender directly

Varying levels of customer service, depending on the platform, in this volatile climate

Some borrowers may not qualify for a loan offer (an important development)

Who should use a lending marketplaceNew esIf you’re a startup that’s never applied for a loan before (or even if you have), using a lending marketplace can make the cess more apachable

You may be able to work with a dedicated advisor, who can walk you through each step and help point your in the right direction, amid market uncertainty

Moreover, And because marketplaces often partner with online lenders, it may be easier for new es to qualify for different options — especially in comparison with applying directly to a bank. » See the best startup loansBorrowers with bad creditSimilar to new es, borrowers with lower credit scores may be able to access more financing options by working with a lending marketplace

Keep in mind that although marketplaces may be able to present you with multiple options, these offers may have high interest rates and short repayment periods — especially if you have a lower credit score

Nevertheless, » Compare the top loans for bad credit owners who want to timeIf you want to time, using a lending marketplace is a great way to line your funding cess

On the other hand, Instead of applying to multiple lenders directly — and having to wait and compare those offers — you can submit one simple application and see multiple loan options in one place (fascinating analysis), given the current landscape

Plus, many lending marketplaces can help you get financing quickly, sometimes in as little as one day (quite telling)

Moreover, » Check out the best fast loans😎 Nerdy TipAlthough these marketplaces can be time rs, they may not always be the best option for highly qualified borrowers

Nevertheless, Additionally, Many traditional lenders don’t work with marketplace platforms — so if you can wait for funds, you’ll ly get a better deal by going directly to a bank

How to choose a lending marketplaceIf you’re considering using a lending marketplace, it’s important to vet the platform to make sure it’s the right fit for your needs — just you would with a direct lender

On the other hand, Ask these questions to help you make an informed decision:Which lenders are in the marketplace

Are they — and the marketplace — reputable

The benefit of using a lending marketplace is getting access to multiple lenders in one place

As such, you’ll want to have an idea of which lenders a marketplace works with

You’ll ly see online lenders, as well as smaller banks or community institutions

Keep an eye out for names you recognize — Bluevine or OnDeck, given current economic conditions

You can also do a Google and read reviews to help you determine whether the lenders in the marketplace are reputable

It’s also helpful to look up the marketplace itself, and verify that it’s a trustworthy company

What types of loans are available

However, Can I qualify

A good marketplace will have a variety of loan ducts to help address the needs of different es

You can expect to see term loans and lines of credit — and might find additional ducts, such as SBA loans, equipment financing, invoice factoring, merchant cash advances or credit cards

Ideally, these ducts will cover a range of loan qualifications, including options for startups and borrowers with bad credit (noteworthy indeed)

Additionally, Are there fees (something worth watching), in light of current trends

If a lending marketplace charges you fees, they should be and upfront them when you start the cess

Preferably, the platform will not charge any fees for its services — and is instead paid by the lender when loans are funded, in today's financial world

Furthermore, (This's how Fundera by NerdWallet works. )Will my credit be impacted

On the other hand, When you submit an application with a lending marketplace, they’ll ly perform a soft credit pull, which won’t impact your credit score, in today's market environment

If you move forward with an offer, the lender will ly do a hard pull (which does impact your credit) — but you shouldn’t see this type of inquiry from an initial marketplace application (an important development)

Additionally, Can I talk to an expert (an important development)

Some lending marketplaces connect you with a dedicated representative, whereas others may let you explore the options on your own, given the current landscape

If you want to be able to work with an expert, you should look for platforms that vide this service upfront

Moreover, Moreover, Is my information safe

When you apply with a lending marketplace, you’re viding sensitive personal and financial information

It’s important to understand the marketplace’s privacy policy and how they tect your data

Fundera by NerdWallet, for example, encrypts sensitive data and never s personal information with unaffiliated third parties for their own advertising or marketing purposes, in this volatile climate

We only your information so that you can pursue options that you’re interested in with our lending partners

How fast can I get funded

You’ll want to understand what funding timelines a marketplace can offer — especially if you’re looking for fast funding, in this volatile climate

Moreover, Timelines will ly vary based on the type of loan and lender you choose to work with, but you may be able to get a loan within a few days

How much do you need (which is quite significant)

See Your Loan Optionswith Fundera by NerdWalletWe’ll start with a brief questionnaire to better understand the unique needs of your

Once we uncover your personalized matches, our team will consult you on the cess moving forward

The authorRanda KrissRanda Kriss is a senior writer and NerdWallet authority on small

Nevertheless, She has nearly a decade of experience in digital content (quite telling)

Furthermore, Her work has been by The Washington Post, The Associated Press and Nasdaq, among others, given current economic conditions

On the other hand, On the other hand, Randa earned a bachelor's degree in English and Spanish at Iona University (formerly Iona College)

On the other hand, See full bio.