As a small business owner, you know that it is best when you can function within your budget and not borrow money. Then no matter how much profit you make, you know it’s all yours and you don’t have to worry about anything but day to day business. But also, you know it’s practically impossible. There will always come a time when you need capital injection, which in the case of small businesses means you need a loan. This will happen either because your business is doing poorly at the moment, so you will need money not to go bankrupt, or for the opposite reason, because you are doing very well, so you want to improve your company.

When that moment comes, you will start thinking about which loan to take. And what will be of particular interest to you is whether it is better to apply online or in a brick and mortar place. The Internet is there to make everything easier and faster for you, but you still have doubts, primarily because of security and trustworthiness. Read our article on whether online loans are safe for small businesses so to solve all your doubts.

How to pick safe option?


It is impossible to answer the title of this text with yes or no because neither answer is correct. Certainly, in most cases, the answer is yes, but of course, there are also cases when it is not safe. That is why we will explain how to pick a safe option and later in the article you will be able to read which are red flags. It is very important to repay the loan on time, because of your credit score, which will also have a great impact on your business. So pay attention to how to pick a safe option.

Ask for a recommendation

Generally, the best way to find a respectable lender for your business is to ask family, friends, but above all the owners of other SMEs. Although people close to you may have experience with loans, it is still a business loan, so you can be better advised by colleagues. If they have done the whole process online several times, from applying to getting a loan from the same lender and everything was great, then this is a guarantee that it is a safe option and you should go for it.

Read reviews


Reviews are moderately authoritative because although they give us a good insight into the experiences of a large number of clients of that lender, they can also be fake. You should definitely be informed in this way, by reading reviews, but do not allow it to be a single source. Because people can make a lot of fake accounts from which they write positive comments to improve their reputation, and that of course is not something you should consider when making a decision.

Check website

The website is very important and you need to analyze it well before making a decision. The first thing a website can tell you is the professionalism of the lender. If it is a very modern website like Thinking Capital that is well optimized for smartphones and highly positioned on search engines, then it is someone who takes their business seriously. If on the other hand you see only the basic website, made on one of the free hosting, it may be that it is a scam. Because fraudsters make a lot of websites to drive as many people as possible, and they do it on free domains so as not to spend money. The next thing that matters is to check the security website. Since this is where you will enter all your personal information, including your credit card, it must have the most advanced security systems. Check all encryption and protocols, and if you know nothing about it, inquire. What many forget, and importantly, is to make sure it starts with “https” and not just “http” because “s” stands for secure website.

Red flags


Unlicensed lenders

Don’t let them convince you that they are legal even though they don’t have a license to borrow money in your state. Unlicensed ones are the biggest red flag and you should walk away immediately. Also check the expiration date of the license, they are not granted lifetime license. They may have had it and then they will show it to you, hoping that you will not pay attention to the date. In fact, their license was revoked, for which there is certainly a justifiable reason. And don’t let them tell you that they can’t send you a license, because it’s an online loan. They must have a license in PDF, which they can easily email you.

No physical address

You may think that they do not need a physical address because they are online lenders. But they absolutely must have a physical address listed on their site, because the company must be registered at a physical address, even if they do not provide services there, but work exclusively online. And keep in mind that a post office box is not a physical address, because many scammers use a post office box to make you think they have a physical address.

Upfront fees


Since you are the owner of the company, you will be contacted by an intermediary and asked for a fee to connect you with a respectable lender. This is something you should never accept, because the intermediary has no right to ask you for a fee. The lender on the other hand has the right to charge you a fee, but only once when the loan is approved. Any fee they request from you before loan is approved is a major red flag.

Lenders who send you advertisements in the inbox

We are not saying that this is always a red flag, so we can say that it is more of a yellow flag. But if you get advertisements in the email inbox, and especially if they end up in the spam section, about how they offer the best terms and that the money will be in your account after just a few clicks, it can happen that they are fraudsters.



We have told you all the most important ways to choose a safe option. There are other things you need to pay attention to. First of all to the name of the company that gives you the money, because by name they often try to gain an illegal advantage. For example, they use the word federal in their name, which does not mean that they are approved by the state. Lastly, don’t choose the most expensive options, such as a payday loan. This may be safe in the sense that the lender is not a fraud, but it is unsafe for your future.