In fact, the Forex market is the largest financial market by trading volume – larger than any stock or commodity market by a good measure. 

The biggest participants in the Forex market are large financial institutions and banks, who use Forex exchange to swap currencies vital to their daily operations. Banks and hedge funds also use Forex to speculate on changing currency values. 

Individual traders, too, can access the market to make speculative trades. If you believe that the USD is going to strengthen against the Euro, for example, you can easily place this wager on the Forex market. 

Currencies on the Forex market are always traded in pairs. Examples include EUR/USD, GBP/AUD, and JPY/USD. Exchange rates for each given pair are established based on trading activity, which is in turn influenced by world events, inflation expectations, and many other factors.

Trading Forex can be complex, and also risky. Even so, there is huge potential for experienced traders. 

In order to trade on the Forex market, investors will need to work with a licensed Forex broker. This article lists the best Forex trading platforms to use, as well as information on how to select the best option for your specific situation. 

What is a Forex trading platform?

Forex trading platform can refer to two things:

• A Forex broker, which is a company that facilitates trades
• The actual platform, or technology, that each broker uses to manage trades

For most Forex traders, the focus should be on choosing a good broker. By selecting a reputable broker, everyday traders can rest assured that they are working with a trustworthy company and that they are paying fair fees to trade. These brokers function in a similar way to stockbrokers, by connecting traders with the global market. A list of the best Forex brokers can be found further down this page. 

For experienced traders, choosing a good platform may also be relevant. There are many different platforms, but some of the most common include:

• MetaTrader 4 (MT4) – The most widespread platform. Offers 1-click trading, limit orders, over 50 indicators, and a very stable trading experience. 
• MetaTrader 5 (MT5) – The newest version of the MetaTrader platform. Offers slightly faster trade execution, a few more order types, and often a wider range of trading instruments.
• cTrader – A newer platform, cTrader is relatively simple. Offers many of the features of MetaTrader, but is less customizable and less powerful overall.
• NinjaTrader – An advanced platform for active traders. Offers advanced charting and trading features, however, it charges an annual or quarterly fee (MT4 is free via brokers).

Most brokers will either use the MT4/MT5 platform, or they will offer their own proprietary trading platform. Some actually offer the choice of multiple platforms. Again, by choosing a good broker, most traders don’t need to worry about the specific platform being used. 

Why are Forex brokers needed?

Forex brokers are needed in order to conduct trades on the Forex market. They act as middlemen, buying and selling currencies to connect traders. Forex is not a centralized market, like a stock market, so these middle-men are necessary for trades to be conducted. 

Each participant on the Forex market must use a broker of some sort. Even large financial institutions may use brokers – or they may serve as their own broker, in some cases. 

A broker is also necessary for obtaining real-time FX pricing information. Brokers will display live pricing for each currency pair that is available to trade. 

Risks of Forex trading

Keep in mind that trading Forex is very risky. Most traders lose money in the market, as you can see in many disclaimers on Forex websites. It is not recommended for new investors.

Most Forex trades are done on margin, which means they are leveraged with loans. This can improve returns, but also magnifies losses. Traders should be fully aware of the risks of Forex trading – as well as the risks of using margin loans – before participating in the market. 

What to look for in a Forex trading platform

There are many different brokers to choose from. Here are the most important factors to consider when making your selection.

Trusted, regulated brokers

Choosing a broker that is regulated by the relevant financial authorities is very important to help avoid scams and shady companies. 

In the US, several different financial regulators are involved, including the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). In Australia, ASIC is the regulating body, while it’s the ESMA in the European Union. In the UK, it’s the Financial Conduct Authority (FCA). 

By selecting a regulated, reputable broker, you can rest assured that your money is in good hands. 

Trading platform(s)

As mentioned, different FX brokers will have different FX trading platforms available for use. Some have their own proprietary platforms, which may have unique functionality, while many use pre-existing trading tools like MetaTrader. 

When browsing different platforms and brokers, some things to keep an eye out for are a mobile app (for Android, iOS, or the OS you use), tools for technical analysis, real-time pricing displays, and research tools to help you learn about trading opportunities. 

If you don’t have a specific platform in mind, MetaTrader 4 is likely a good option, as it is user-friendly and used by many different brokers. 

Investment options

The number and type of investment options vary substantially between brokers. The number of Forex pairs for currency trading, for example, maybe as few as 50 and as many as 150+. If you want to trade diverse currency markets, look for a broker with a wide selection. 

Some brokers offer multiple account types – retail investor accounts, with the basics, and active trading accounts, with more advanced features and more complex instruments to trade. 

Some brokers also offer access to other asset classes, like equities, bonds, and even cryptocurrencies like Bitcoin. Keep the available investment options in mind when shopping for a new broker. 

Trading costs

Trading on the Forex market costs money – but the costs can vary between brokers. To keep costs down (and improve returns over time), it’s wise to consider the trading costs of each broker. 

Forex brokers make money in two ways:

• Charging commission on each trade 
• Through the Spread, which is the difference in between the buy and sell price

Most brokers make the bulk of their profit through the spread. Some brokers offer low spreads but slightly higher commissions, which are usually more attractive to higher-volume traders. 

Before making a selection, look for a broker with a good balance of reasonable costs, and full-featured trading tools. In other words, you don’t necessarily want the cheapest option, but you also don’t want to overpay. 

Leverage and margin

Most Forex trades are conducted on margin, meaning that the trader borrows money temporarily in order to increase the size of the trade. For instance, a trader may use $1,000 of her own money, and $9,000 of borrowed money, for a total trade value of $10,000.

All FX brokers will offer margin, but the terms, interest rates, and specific requirements can vary substantially. If you plan to trade on margin, this is an important factor to pay attention to. 

Customer support

The top Forex brokers will offer quality customer service, which can help guide traders through any issues they may face. To gauge customer service, you can read customer reviews, or simply call in to ask some questions. 

Learning resources

Many brokers and trading platforms will offer learning resources to help traders gain more knowledge of the complex Forex market. This could include information on trading strategies, understanding volatility, and liquidity, etc. 

Some brokers go a step further by offering a demo account. These are simulated accounts that use fake money and are intended to practice trading strategies. If you’re brand new to Forex, using a demo account is a great way to learn without risking any actual money. 

Other financial services

Some Forex brokers offer a bundle of financial services, beyond just Forex trading. For instance, some function as full-service brokers, offering trading of equities, bonds, mutual funds, and more. Some offer retirement accounts or tools to trade in cryptocurrencies. Some even offer bank accounts and other financial services. 

Other Forex brokers focus solely on Forex trading itself. If you’re someone who likes to keep things simple, there are some benefits to keeping multiple financial services under one roof. For other traders, this is not an important factor. 

Best Forex trading platforms

The best Forex brokers are listed below. These selections were made based on a combination of available currencies to trade, pricing/fees, customer service, and more. 

IG

One of the largest brokers in the world, with a wide variety of currency pairs to trade

IG is one of the most popular Forex brokers, with operations spanning the globe. It’s popular among professional investors and casual traders alike. 

The biggest selling points of IG are its wide selection of tradable currency pairs (over 90 at the time of this writing), and very competitive pricing. IG offers spreads of as low as 0.745 on popular FX pairs. 

IG’s platform is intuitive, yet powerful. This makes it well suited to traders of any skill and experience level. They even offer learning resources to help beginner traders learn the ropes. 

CMC Markets

Over 150 currency pairs to trade, with competitive pricing

CMC Markets is a global Forex broker with a significant operation in the US. They offer one of the largest selections of tradable currency pairs in the industry. At the time this article was written, over 150 currency pairs were available on the CMC Markets platform. That’s nearly twice what many competitors offer, so if you’re looking for variety, CMC Markets is a great choice. 

Pricing, too, is competitive. A typical spread on a popular pair like EUR/USD may be as low as 0.75 pips. Plus, rebate programs for high-volume traders can lower costs even further. 

There is no minimum deposit to get started. CMC’s powerful Next Generation platform offers a full set of trading features but is also very easy to use.

Interactive Brokers

A sophisticated platform for advanced traders 

Interactive Brokers is a multi-use online broker that operates in many countries. The platform offers Forex trading, as well as tools for trading CFDs, ETFs, mutual funds, equities, bonds, and more. The wide selection of investment options makes Interactive Brokers a good choice for those looking to trade a diverse set of assets all in one place. 

Interactive Brokers is mostly meant for sophisticated traders. They offer advanced tools and charts, but the interface may be overly complex for new traders. The design is less user-friendly than some alternatives. Traders can access over 100 currency pairs on Interactive Brokers, most of which offer competitive spreads. 

See the full review of Interactive Brokers here.

eToro

A versatile broker covering Forex, equities, crypto, and more

eToro is a trading platform with features focused on “social trading”. Their Copy Trading feature lets investors “follow” professional traders, and actually directly copy their trades automatically. eToro also has social tools that can help traders gauge market sentiment and momentum for various assets. 

eToro is also unique in that it offers access to a wide variety of investment classes. For Forex, around 50 currency pairs can be traded – which is lower than average – although spreads are pretty competitive. On eToro, traders can also access cryptocurrencies, equities, bonds, and more. 

There are beginner-friendly resources and features on this platform, but there are also sophisticated tools to keep experienced traders happy. eToro even offers a demo account, which can be used to practice trading without risking real money. 

Forex.com

The #1 Forex broker in the US, with transparent and reliable pricing 

Forex.com is a popular Forex broker – in fact, it was the #1 Forex broker in the United States in 2020. They offer 90+ currency pairs to trade and many CFDs. they even have Cryptocurrency CFDs in some countries. 

Forex.com has higher trading costs than many brokers, however. A typical spread on a popular pair may be around 1.4 pips. This can be reduced through their active trader rebate program, but even so, costs are a bit higher than average. 

While not the cheapest broker out there, Forex.com is still quite useful. It’s very user-friendly and offers both the popular MetaTrader 4 (MT4) platform, as well as its own proprietary platform. Lastly, Forex.com has many useful learning resources, training tools, and strategic articles to browse. 

TD Ameritrade FX

A full-service broker with a variety of investment options

TD Ameritrade is a popular brokerage offering equities, bonds, and of course, Forex trading. For Forex traders, TD Ameritrade offers the think or swim platform, with powerful research and learning tools for education.

There are over 70 currency pairs to trade on the Think or Swim Forex platform. There are no CFDs, however, so there are fewer total investment options on this platform. 

See the full review of TD Ameritrade here.

The post Best Forex Trading Platforms (2023) first appeared on Chamber of Commerce.

But how does one invest in stocks? Before choosing individual companies to invest in, one must first select a stock trading platform to use. This guide will provide recommendations on the best stock trading platforms, as well as guidance on how to choose the right broker for you. 

What is a stock trading platform?

A stock trading platform, or a stockbroker, is a company that serves as a middle man between investors and the stock market. These brokers facilitate trades, allowing small investors to gain access to the same financial markets as large scale institutional investors.

In past decades, stockbrokers catered to wealthy individuals, and most transactions were done over the phone. Today, technology has enabled brokers to process transactions online, through intuitive digital platforms. Plus, brokers are much more efficient, and much cheaper, than they were originally – which allows them to cater to everyone, not just wealthy investors. 

Today, there are hundreds of stock trading platforms available. Some are ultra-low-cost, with no-frills features. Others are higher cost, but offer advanced trading features, or even guided investing. 

Why use a stock trading platform?

Stock trading platforms are required to purchase equities (stocks) in almost all cases. If you wish to invest in stocks, or even ETFs and mutual funds, going through a broker is a must. 

The only real exception is if you are purchasing stock in your employer’s company, directly through your employer. But other than this niche situation, it’s essentially required to use a stockbroker. 

You can also buy stocks through a traditional broker, which may operate a brick-and-mortar office, and conduct trades over the phone – or even in person. This old-fashioned arrangement might appeal to some, but it almost always comes with higher costs. 

To maximize convenience, and minimize costs, using an online stock broker is recommended. We cover the best stock brokers in the list below, but first, let’s cover what you need to know about choosing a trading platform. 

How to choose a stockbroker

There are hundreds of stockbrokers and trading platforms to choose from. How do you select the best one? Here are the key things to keep in mind. 

Fees and trading costs

The fees you pay for investments can significantly impact your returns over time. There are a few different costs to be aware of:

• Transaction fees, which are charged every time a security is purchased or sold
• Expense ratios, which are charged annually on many ETFs and mutual funds
• Account fees, such as annual fees or set-up fees

Each broker will have different pricing structures, so it’s important to compare options.

For transaction fees or trading commissions, some charge a flat commission on each trade, some charge a percentage of the trade value, and some have no transaction fees at all. 

Over the last few years, many mainstream brokers have transitioned to a no-transaction-fee model. This is great news for investors, and it means that many platforms that still don’t offer no-fee options are behind the times. 

Some mutual funds may also have front or back-end loads, which are substantial fees charged when you invest in a mutual fund or later sell that same fund. These should be avoided. 

For expense ratios, the vast majority of index funds, exchange-traded funds (ETFs), and mutual funds will have some sort of expense ratio. Individual stocks do not have this expense. 

An expense ratio can range from as low as 0.05% ($5 annually on a $10,000 investment) to 1.5% or more ($150 annually on a $10,000 investment). 

However, these fees have more to do with the specific investments you choose, rather than the actual broker. That said, each broker offers different ETF/fund options – look for a stock trading platform with a variety of low-cost funds. 

For account fees, these are relatively rare for large scale brokers. Some may charge a fee to transfer in existing assets, or to handle complicated account transitions. Set-up fees are rare unless opening a complex account like a self-directed 401k. In general, avoid brokers with account fees.

Account types

Investors can choose from standard (taxable) investment accounts, retirement accounts such as Roth IRAs, margin accounts, and more. Most online brokers now offer a variety of investment account styles – but the details of each will vary. 

If you are simply looking for a standard, taxable brokerage account, nearly every broker offers this. However, the specifics of the account – such as available investments, margin requirements, etc. will vary. 

If you are looking for a retirement account, you’ll need to be pickier in choosing your broker. Most brokers will offer standard accounts like Roth IRAs, but specialty accounts, such as SEP IRAs, individual 401ks, etc. can be harder to find. 

Investment options

What kind of investments does the platform offer? Of course, all stockbrokers will offer trading in stocks. For individual stocks, most brokers offer similar selections, at least for US-based companies. However, not all brokers allow you to trade on international stock markets, so keep this in mind. 

The big difference often comes in a broker’s selection of ETFs and mutual funds – and the fees they charge to invest in these products.

The ability to conduct options trades is another big one to look out for. Options trading is a way to leverage your investment and is a popular choice for day traders and advanced investors. 

Likewise, some stock trading platforms offer alternative assets, such as cryptocurrencies, Forex currencies, etc. If you’re looking for anything specific, take a detailed look at the offerings of any brokers you are considering. 

Account minimums

Some brokers will have a minimum amount of money that must be deposited from your bank account in order to open an account. This could be as little as $100 or as much as $100,000+, depending on the broker. Most online trading platforms now offer no-minimum or low-minimum accounts, but it’s still important to pay attention when shopping around for brokers. 

Customer service

When selecting a stock trading platform, it’s best to think about the long-term, by assuming that you will use that same broker for many years to come. With this in mind, choosing a company with good customer support is important. 

Most brokers offer phone support, and may also have email or online chat support. Some just offer routine support, to fix issues or answer questions. Others offer actual investment guidance, helping new investors select asset classes and build their portfolios. 

Interface and apps

Each trading platform will have a different interface and trading tools. Some are very intuitive and designed for beginners. Others may be more tricky to navigate, but offer advanced charting and far more data for more experienced traders. Some brokers have downloadable desktop platforms with very advanced features, while others are only available in a browser. 

For instance, apps like Robinhood are very user-friendly but lack sophisticated analysis tools. On the other hand, established brokerage firms like Interactive Brokers offer extensive tools for experienced traders, but their interface is more complex. 

If mobile trading is of interest to you, pay attention to whether or not the broker has a mobile trading app – and which features that app offers. If robo-trading is a feature you want, look for a broker with these advanced algorithmic tools. 

The best stock trading platforms

Investors and active traders have many choices when it comes to where to actually conduct trades. The recommendations below consist of the best stock platforms to use, based on a combination of low fees, wide investment variety, good customer service, and user-friendly tools. 

Fidelity

A wide selection of investment options, with commission-free trading

Fidelity is one of the largest stockbrokers in the US. It offers many different account styles and investment options, as well as commission-free trades for many assets. Fidelity users can easily trade stocks, bonds, options, ETFs, mutual funds, and more through Fidelity’s platform. 

For advanced traders, Fidelity offers a suite of research features and analysis tools. Casual investors and professionals alike will appreciate Fidelity’s wide range of commission-free trading options. There are even a few ETFs and mutual funds with expense ratios of zero, which means they are truly free to invest in. 

Pros

• Choice of a standard brokerage account, margin account, and various retirement accounts
• Zero commissions for stock trading
• Wide variety of investment options
• Wide variety of low-cost and no-cost index funds
• Advice from financial advisors, if desired

Cons

• Higher than average margin rates
• The website can be difficult to navigate

See the full review of Fidelity here.

TD Ameritrade

A full-service broker that also offers access to Forex currency trading

TD Ameritrade is one of the best online brokers. It offers stocks, ETFs, mutual funds, and more, with no commissions on many trades. They offer a variety of account types, including taxable brokerage accounts and retirement accounts. 

Plus, the service can be used to monitor real-time Forex data, and actively trade in the Forex market. TD Ameritrade’s Think or Swim Forex trading platform is among its most popular features. 

Pros

• Forex currency trading
• A wide selection of low-cost investments
• 24/7 support

Cons

• Does not support crypto trading (although TD Ameritrade is actively working towards supporting this feature)

See the full review of TD Ameritrade here.

Charles Schwab

A low-cost broker that also offers a very useful bank account

Charles Schwab is a budget-friendly broker with a wide variety of investment options. Users can trade stocks, ETFs, mutual funds, bonds, and more on the platform. Users can build watch lists to keep an eye on interesting securities, and Schwab also offers investment advice to some clients. 

If you prefer to manage all your personal finance needs in one place, Schwab has a variety of financial products, including a bank account. Their bank account is useful for travelers, as it refunds all ATM fees worldwide. 

Pros

• Wide variety of investment options
• Low costs
• Powerful bank account with a debit card that refunds ATM fees
• Schwab Intelligent Portfolios offers a robo-investor-like experience 

Cons

• Minimal access to foreign investments

See the full review of Charles Schwab here.

Interactive Brokers

A powerful trading platform for experienced traders

Interactive Brokers is an online brokerage that mostly markets itself towards sophisticated investors and active traders. It focuses on trading of complex instruments, like options, cryptocurrencies, futures, and Forex currencies. 

With that said, Interactive Brokers also has a beginner-friendly account, with no commissions on stock trades. They also offer educational resources and research tools, such as webinars and tutorials. 

Pros

• Very low rates for margin trading
• Trade Forex, cryptocurrencies, futures, and more
• Advanced trading tools

Cons

• The interface can be difficult to navigate
• Charges inactivity fees on some accounts

See the full review of Interactive Brokers here.

TradeStation

An advanced trading platform for experienced investors

TradeStation is an online broker with an emphasis on serving experienced investors and traders. They offer extensive analysis and research tools, and a wide variety of investment options. 

Traders can buy and sell stocks, ETFs, futures, and even cryptocurrencies on the TradeStation platform. TradeStation also offers access to Initial Public Offerings or IPOs. 

Pros

• Advanced trading tools
• Supports crypto trading and futures
• Good variety of account types, including retirement accounts

Cons

• High fees
• Geared more towards active traders than long-term investors

See the full review of TradeStation here.

ZacksTrade

A solid platform for trading international assets

ZacksTrade is a trading platform that differentiates itself by offering a wider variety of international asset classes. For those looking for global exposure, it could be a good option.

ZacksTrade offers a lot of research tools, as well. Some are free, while others are part of a premium subscription package. 

Pros

• Good selection of global investments on more than 90 stock exchanges
• Top-notch research tools and subscriptions

Cons

• Charges a commission on most trades

See the full review of ZacksTrade here.

TastyWorks

A platform geared towards options trading

TastyWorks is a newer broker that specializes in options trading. Most TastyWorks users utilize the platform to trade options and derivatives, although the broker of course also offers normal stock trading. 

While TastyWorks focuses on active traders, they also offer tools for everyday investors, including retirement accounts. 

Pros

• Good tools for options trading
• Advanced trading platform
• Fast execution speed

Cons

• No fixed income trading
• The platform can feel complex for beginners

Robinhood

A slick app-based broker with commission-free trading

Robinhood is one of the pioneers of the world of discount brokers. They were among the first to offer stock trading with no commissions or fees. They now even offer no-commission trades for options. They also support fractional shares, allowing for small investments in any company. 

There is a variety of educational material for beginners available, and Robinhood’s app is very user-friendly and intuitive. Robinhood sometimes runs a promotion where you can get a free stock when signing up.

Pros

• No commissions on stocks or options trades
• Fractional shares 
• Very user-friendly mobile app
• Support for Bitcoin and Ethereum trading

Cons

• Limited account types
• Minimal customer support

See the full review of Robinhood here.

The post Best Stock Trading Platforms (2023) first appeared on Chamber of Commerce.

The post Best Forex Brokers in Canada (2023) first appeared on Chamber of Commerce.

The largest financial market is actually the foreign exchange market, otherwise known as Forex or FX. 

The Forex market is a global over-the-counter market that facilitates trading between different currencies. Every respectable currency in the world is traded on the forex market.

The foreign exchange market is open for trading 24 hours a day, 5 days a week. It offers a place for speculators and professional traders to place exchanges between any two pairs of currencies. It’s also chiefly responsible for setting global exchange rates for every currency. In other words, the exchange rates offered by banks, travel kiosks, etc. are based on live trading prices from the Forex exchange. 

Large financial institutions and banks are the largest customers of the Forex exchange. They trade massive quantities of currencies each day, both for speculative purposes and for the purpose of running their international banking operations. Multinational banks collect deposits in dozens of currencies and turn to the Forex market to exchange them. 

Currencies on the Forex market are always traded in pairs. For instance, the GBP/USD pair indicates the exchange rate between these two currencies; or, the number of pounds that one dollar buys. Popular Forex pairs include EUR/USD, GBP/AUD, JPY/USD, and several others. 

Forex is a complex market, and its biggest participants are large banks. That said, individual investors and traders can use the Forex market to trade currency pairs. This is a risky, but potentially profitable venture.

To trade on the Forex market, UK investors will need to seek out a Forex broker. 

What is a Forex broker?

A Forex broker, or FX broker, is a company that offers a trading platform for Forex traders. It facilitates trades between individual investors and the global Forex market, offers trading tools and insights, and more. 

Some brokers charge small fees on every trade, known as a commission. Most make the bulk of their money through the spread, which is the difference between the buy and sell price on a currency pair. 

Brokers provide live pricing for every currency pair, drawn from official Forex markets. Most also provide leverage, allowing investors to trade on margin. In simple terms, this means investors can borrow money in order to increase the size of their trades. 

A Forex broker is similar to a stockbroker, where stocks and bonds are traded. The difference is in the specific financial vehicles available for trading.

Most UK Forex brokers are only for trading on the Forex market. In other words, you can’t necessarily trade other assets, like equities or cryptocurrencies, via these Forex brokers. 

Some British Forex brokers buck this trend, offering a full suite of investment services. For example, on eToro, investors can trade equities, bonds, currencies, and even cryptocurrencies such as Bitcoin. 

In summary, a Forex broker is the middle-man between investors and the global Forex market. They function similarly to investment brokers.

Why are Forex brokers needed?

Brokers are needed to facilitate currency trades on the Forex market. Each trader in the market must use a broker of some sort, with the exception of large global banks who can essentially function as their own broker. 

Forex brokers provide the platform that’s used to actually connect buyers and sellers. They use modern interfaces to help traders navigate a fairly complex market. 

Brokers are also the primary way that traders glean information on live currency exchange rates. The live prices of currency pairs are displayed clearly and automatically update nearly every second. 

Risks of Forex trading

Keep in mind that trading Forex is risky. Volatility can be high, and leverage can make trading even more high-risk. If you note disclaimers on various trading platforms, you’ll see that many traders lose money attempting to trade currencies. 

Many Forex products are complex instruments that require study in order to trade effectively. In short, Forex trading is not recommended for inexperienced investors. 

What to look for in a UK Forex broker 

There are many FX brokers competing for your business. How do you know which one to choose? These are some of the key factors you should consider. 

Trusted, regulated brokers

First and foremost, it’s vital to choose a trusted, respected broker. This means brokers that are approved by official regulators. In the UK, this means the Financial Conduct Authority or FCA. For the EU, it’s the ESMA, among others. Some brokers are also insured by the Financial Services Compensation Scheme or FSCS. 

By choosing regulated brokers, you can avoid scams and ensure you’re working with a trustworthy firm. All brokers on the list below are regulated by the FCA. 

Check out our roundup of the Best Online Stock Brokers

Trading platform(s)

Brokers will offer different trading platforms, tools, and interfaces. Because trading Forex can be complex, having a broker with an intuitive platform is very helpful. 

Most brokers will offer both online trading and trading via a mobile app. Some have downloadable software for a desktop trading version.

Some brokers have their own, proprietary trading platform. Others simply offer an established platform, the most popular of which is Meta Trader 4 (MT4). If you are experienced with a particular platform, finding a broker that offers that platform is wise. 

Platforms also offer different features and trade styles. Advanced traders will want sophisticated charting, access to spread betting, CFDs, and a wide variety of currency pairs. 

Trading costs

Trading costs can eat into your returns. All brokers have costs, but they can vary substantially.

There are two primary costs to be aware of:

• Commission, which is a flat fee or a percentage fee on every transaction
• Spread, which is the difference between the buy and sell price

Most brokers make the bulk of their money through the spread. Comparing brokers to find one with competitive spreads can help you save money on trading costs, which could improve your long-term returns. 

Sophisticated traders may also wish to look into ECN brokers, which may offer lower costs in some cases. 

Leverage and margin

Most people who trade Forex do some using some sort of leverage. For example, this means that they invest $1,000 in cash, but are actually borrowing $9,000 for a total risk of $10,000. 

Using margin can improve returns. Because of the massive size and liquidity of currency markets, the swings in prices are usually fairly minor. This makes securing substantial profit to gain capital difficult, particularly without margin. 

If you plan to use leverage, look into the amounts available from each broker, as well as the costs associated with margin trading. 

Customer support

Choosing a reputable broker also means finding one with good customer support. This is important for any trader, but particularly for high-volume traders and beginner traders. 

You can read customer reviews to get a feel for the customer service of a particular company. Or, simply call in to ask some questions. 

Learning resources

Forex is complex, so many brokers provide tools to help their customers learn more about the markets. These could include informational webinars, blog posts, and more. Some brokers even offer demo accounts, where you can trade in a simulation where you don’t actually risk any real money. 

Other financial services

Some Forex brokers offer other services, such as retail investor accounts, retirement accounts, brokerage services, cryptocurrency trading accounts, and even normal checking accounts. 

For those who prefer simplicity, having multiple services available from one company is convenient. 

Best Forex Brokers in the UK

Residents of the United Kingdom have many options to choose from when it comes to trading FX. Below, find some of the best UK Forex brokers, based on a combination of features, pricing, available currency pairs, and customer service.

eToro

A versatile broker offering trading in Forex, stocks, cryptocurrencies, and more

eToro is a popular trading platform for UK residents. In fact, the company operates in many countries, connecting traders with global exchange networks. 

eToro can be used to trade nearly every financial asset class – currencies, stocks, bonds, cryptocurrencies, and more.

eToro is a social trading platform, which sets it apart from many competitors. One of their most popular features is Copy Trading. This feature allows you to follow professional investors, and automatically copy their trades in real-time. 

eToro offers over 50 currency pairs to trade. Spreads are competitive, with an average of 1 pip on popular currency pairs. There is no account minimum (although there is a $200 minimum to use the Copy Trading feature). 

There are also many beginner-friendly tools from this broker, including extensive learning resources, an intuitive interface, and the unique Copy Trader functionality. Plus, eToro has a demo account that you can use to test your trading strategies for free. 

IG

A low-cost broker with lightning-fast speeds and a wide variety of currency pairs

IG is one of the largest and most popular Forex brokers in the UK – and the world. The platform is popular among professional and casual traders alike. 

IG is known for several things: A wide selection of currency pairs (90+), an exceptionally fast trading platform, and some of the lowest spreads in the industry (as low as 0.745 on popular pairs).

There is a £250.00 minimum deposit to get started. IG offers learning resources to new traders. The broker is fully licensed and regulated by the Financial Conduct Authority (FCA) and is a trusted partner for hundreds of thousands of traders worldwide. 

CMC Markets

The widest selection of currency pairs, and competitive spread pricing

CMC Markets is a popular choice, and for good reason. They offer one of the widest selections of currency pairs, with over 150 at the time of this writing. That’s more than double the selection of many peers. 

Their spreads are also extremely competitive. For instance, the typical spread on the EUR/USD is just 0.74 pips. CMC also has rebate programs for high-volume traders. 

Despite all its advanced features and tools for experienced investors, CMC Markets has no minimum deposit. Its award-winning Next Generation platform is easy to use, yet includes features that more experienced traders look for. 

Pepperstone

An intuitive platform with social trading features

Pepperstone is a popular broker with copy trading/social trading features. Many new traders prefer it because it makes trading simple.

Pepperstone has over 60 currency pairs. Spreads are a bit higher than average, at a typical 1.160 on popular pairs. However, Pepperstone has zero-commission trading.

Alternatively, high-volume traders can look into the Pepperstone “Razor” account type. This account does have a trading commission, however, spreads are much lower. Depending on your trading style, this may save you money in the long term. 

Pepperstone has no minimum deposit amount, although they recommend a starting balance of at least £500.

City Index

Competitive spreads and choice of multiple trading platforms

City Index is a popular choice for sophisticated Forex traders. It offers the choice of two beginner-friendly apps (Web Trader and Advantage), as well as advanced trading platforms like MT4 and City Index’s own AT Pro platform.

City Index offers trading in 80+ currency pairs and features competitive spreads averaging around 1.1 pips on popular pairs. 

With a low, £100 minimum deposit and beginner-friendly tools, City Index is suitable for casual traders. At the same time, it offers advanced trading features suitable for sophisticated traders. 

Interactive Brokers

Sophisticated Forex and CFD trading tools, plus access to other investible markets

Interactive Brokers is a large online broker operating in many countries, including the UK. They offer tools for trading CFDs, Forex currency pairs, stocks, ETFs, bonds, and more – all on the same platform. 

Interactive Brokers has a sophisticated user interface that some beginners may find challenging to navigate. Their Trader Workstation platform has great tools for experienced traders but lacks a user-friendly design. 

More than 100 currency pairs are available to trade, and spreads are competitive (although spreads aren’t published clearly). Interactive Brokers has a unique pricing structure that will likely be best suited to active traders. 

See the full review of Interactive Brokers here.

XTB

Quality customer service and competitive spreads

XTB is a major Forex broker that is known for quality customer service and competitive spread pricing. They have an excellent reputation for customer care, whether the customer is a small casual trader or a sophisticated professional investor. 

They offer fewer currency pairs than many competitors, with around 48 at the time of this writing. However, their spreads on the pairs they do offer are very low – as low as 0.86 pips. 

XTB has a £250 minimum deposit. Users can trade on the proprietary xStation 5 platform, or on the full Metatrader 4 platform. 

FXCM

Useful tools for high-volume, active Forex traders

FXCM is a good option for very active Forex traders and those who trade large volumes of currencies. 

Their basic account is a bit lackluster, with higher-than-average costs, and a lower-than-average selection of currency pairs (39 at the time of this writing). 

Where the value of FXCM comes in is in their Active Trader account. This account style requires a  £25,000 minimum deposit but offers much more competitive spreads and powerful trading tools.

Investors with FXCM can trade on several platforms, including MT4, ZuluTrade, NinjaTrader, and Trading Station.

Forex.com

A well-established platform with a good user experience

Forex.com is a large broker, operating in several countries. They are certainly not a discount broker, as their spreads are typically higher than many competitors. Average spreads are around 1.4 pips. 

While it’s not the cheapest option, Forex.com offers a very user-friendly experience. They have a good mobile trading platform, extensive learning resources, and powerful tools for experienced investors. 

Forex.com offers a wide variety of investment options. There are 90+ currency pairs available to trade, as well as CFDs, options, and even crypto CFDs in some countries. 

FXPro

A user-friendly platform offering both Meta Trader 4 and Meta Trader 5

FX Pro is a good choice for fans of the Meta Trader platform. It offers the full suite, with both MT4 and MT5 (most competitors only offer MT4). It also offers the CTrader platform. 

For fans of these platforms, FXPro is a good choice. The downside is higher-than-average trading costs. The typical spread on popular pairs is around 1.5 pips.

The post Best Forex Brokers in the UK (2023) first appeared on Chamber of Commerce.

The Forex market is where banks, investment funds, and individuals go to trade currencies. It’s a global, over-the-counter market, which pairs buyers and sellers hoping to exchange various currencies. 

Forex trading takes place 24 hours a day, 5 days a week. The exchanges made on Forex set the global exchange rates for just about every currency out there. The exchange rates that you might find at a bank or airport travel kiosk are set based on Forex trading. And in fact, when you exchange money at a travel kiosk, you’re technically completing a Forex transaction. 

The biggest users of the Forex exchange are financial institutions and banks. They trade various currencies to assist in the day to day operations of their businesses, as well as to profit from speculative trades. 

Individuals also participate in Forex trading, mostly for speculative purposes. For example, if a trader believes that the AUD is strengthening, they can place a trade based on that belief. 

When trading currencies on the Forex exchange, currencies are paired up. For example, the AUD/USD pair represents the exchange rate between the Australian dollar and the United States dollar. Commonly traded pairs include EUR/USD, JPY/USD, GBP/AUD, and others. 

When a trade is placed, the trader is buying one currency by selling another. As such, Forex pricing doesn’t represent a comprehensive value for a specific currency – but rather, a value for a specific currency as compared to another specific currency. 

Forex is a complex market. It’s primarily used by banks and sophisticated traders, but average investors can also participate. Forex traders in Australia must use a Forex broker to conduct trades. 

What is a Forex broker?

A Forex broker, sometimes called a FX broker, is a company that facilitates trading on the Forex market. 

Forex brokers make money on the spread, which is the difference in price between the buy price and the sell price on a given currency pair. These spreads are very small, but brokers make their money because of the huge volume of trading that takes place. 

Some FX brokers will charge a small commission on every trade. This is typically in addition to spread pricing differences – although generally speaking, brokers who use trade commissions often have better spreads. 

These brokers are similar to stockbrokers where investors buy and sell equities, bonds, etc. The difference is in the types of financial vehicles available to trade.

Most Australian FX brokers focus specifically on Forex, rather than other markets. This means that most Forex brokers only offer Forex trading. A few buck this trend by also offering trading in equities, funds, and even alternative assets like cryptocurrencies. 

Why are Forex brokers needed?

Forex brokers facilitate trades between buyers and sellers, essentially acting as a middleman. Every trader in the Forex market must use some sort of broker. 

Brokers provide the actual platform, infrastructure, and technology needed to facilitate trading. Their interfaces allow traders to navigate the complex Forex market and trade with an informed outlook. 

Forex brokers are also the main way that most traders obtain information on the actual currency exchange rates. Forex is not a centralized market like the stock market, which means that each broker may have slightly different pricing at any given moment. Each broker will have a real-time feed of current prices for each currency pair, and rates will update constantly while the market is open. 

Risks of Forex trading

Forex trading is a high-risk activity. Most trades are conducted with a substantial margin (loans), which means profits and losses are magnified. Even a small amount of volatility in the wrong direction can cause substantial losses. Most trading platforms have disclaimers relating to this risk, and indeed most beginner Forex traders lose money. 

Forex trading is best for experienced, sophisticated traders. Unlike passive stock index investing, trading on the Forex market is usually not recommended for casual investors. 

What to look for in an Australian Forex broker 

There are many brokers serving Aussie investors. How do you pick the “best” one? These are some of the factors that you should keep in mind. 

Trusted, regulated brokers

To avoid scams and issues, it’s very important to work with a trusted broker. Forex brokers are regulated by various financial authorities. Each country has its own regulators – the FCA in the UK, and the FSCA in South Africa, for example. 

In Australia, the relevant financial authority that regulates Australian financial services is the Australian Securities and Investments Commission (ASIC). 

Australia has strict rules for regulated Forex brokers. In order to accept Forex or CFDs traders, a broker must first obtain authorization from ASIC, via an AFSL license. These regulations are designed to help keep traders and investors safe from scams, and to strengthen the stability and liquidity of the financial system. 

Check out our roundup of the Best CFD Brokers

Trading platform(s)

There are several different trading platforms, or interfaces, that can be used to trade Forex markets. Each offers different features, visual designs, charting, and even trade execution speeds. These platforms offer very different trading experiences, different tools for technical analysis, etc. 

Some brokers have their own proprietary platform. Some use existing platforms – MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are among the most popular.

Interestingly, some brokers offer several platforms to choose from. If you have experience with a particular Forex trading platform, look for a broker that offers it. If not, look for a user-friendly option. 

Trading costs

There will always be trading costs associated with participating in the Forex market. However, these costs can vary substantially between brokers. 

There are two main categories of cost to keep in mind:

• Commission, which is a fee charged on every transaction
• Spread, which is the difference between the listed buy and sell price of a currency pair

The majority of brokers make their money from spreads. This is standard industry practice, and the differences in buy/sell rates are very small. Nonetheless, for high-volume traders, the costs can add up. 

Sophisticated traders operating with high trading volume may actually find lower total costs in a trading account with a flat fee commission structure. Generally, brokers that have a commission on each trade will offer tight spreads – which can benefit larger traders. ECN brokers may also be a lower-cost option for experienced traders. 

Investment options

Each broker will offer slightly different investment and trading options. Some offer derivatives, CFDs, and other complex instruments, while others keep trading simpler. 

Even for simple currency pairs, the choice of broker makes a big difference. Some brokers may offer 50 currency pairs, while others offer 100+. If variety is important to you, opt for a broker with more substantial offerings. 

Leverage and margin

The majority of Forex trading is done using leverage, or margin. For example, a trader may wager $1,000 of her own money, but make a total investment of $10,000 (with a $9,000 margin loan). 

Using margin magnifies returns – but also magnifies losses. But because Forex currency exchange prices are much more stable than the stock market, for example, the margin is almost required to make any substantial profit on trades. 

If you plan to use leverage, take a close look at the requirements, terms, and costs from each broker. And before you trade, make sure you completely understand the unique risks of trading on margin. 

Customer support

Good customer service is another important factor to look for in a broker. If any issues arise, you want to know that you can trust the broker to sort things out. It’s particularly important for beginners, and high-volume traders. 

To gauge a broker’s customer support, you can read customer reviews, or even call in to ask questions. 

Social trading

Social trading is a unique set of features that allow investors to see how other traders are operating, and potentially gain insights into market sentiment. It is primarily aimed at retail investors looking to shadow more experienced traders.

Some brokers go a step further, and offer “copy trading”. As the name suggests, this feature allows users to directly copy the trades of other professional investors. You can follow a trader, allocate funds to “copy” them, and the system will automatically copy each trade they make. 

If these features are something that interests you, be sure to look for a broker with social trading tools. 

Learning resources

Many Forex brokerages offer learning resources, webinars, blog posts, and other information to help traders learn more about the Forex market. Forex trading is complex, so having some guidance is helpful. 

Other financial services

Some Forex brokers only offer Forex trading, while others offer a wide range of financial instruments and account types. 

For investors who prefer to keep things simple, there is some appeal in having your retirement accounts, Forex trading accounts, and even retirement accounts in the same place. For other investors, having a wider variety of financial products in one place is not a substantial determining factor. 

Best Forex Brokers in Australia  

Australian traders from Sydney to Melbourne have plenty of choices when it comes to brokers. The list below compares some of the best options, based on a combination of costs, customer reviews, investment options, and customer support. 

eToro

A social trading platform broker offering Forex, equities, cryptocurrencies, and more

eToro is a popular trading and investment platform that operates in many countries, including Australia. This broker can be used to trade in most financial assets, including Forex trading, equities, bonds, and even cryptocurrencies like Bitcoin. 

One unique aspect of eToro is its social features. Copy Trading, a key offering from eToro, lets everyday investors copy the trades of professional traders, automatically. You simply select a trader to follow, allocate funds, and their trades will be copied automatically.

As for Forex trading, eToro offers 47+ Forex pairs, as well as CFDs and other investment vehicles. The typical spread is around 1 pip. This is slightly higher than some low-cost competitors, but near the average of all options on this list. 

For beginners, eToro has a demo account that can be used to test trading strategies risk-free. There are also some learning resources to explore. 

IG

A low-cost, high-volume broker with a wide variety of FX currency pairs

IG is one of the most popular FX brokers in the world. The service is a popular choice for Australians, as IG is regulated by ASIC, and offers many benefits for traders. 

The first is speed. IG has one of the fastest trade execution speeds in the industry. Their interface is also slick and fast to navigate. 

Selection is also excellent. IG offers over 100 currency pairs to actively trade, as well as a huge selection of CFDs. Spreads are very competitive – as low as 0.745 on popular currency pairs. 

IG offers beginner-friendly tools and learning resources. The minimum initial deposit is £250.00. 

CMC Markets

A large broker with competitive pricing and a massive selection of tradable currency pairs 

CMC Markets is a popular global Forex broker. Their main selling point is sheer selection: With over 150 currency pairs, and nearly 10,000 tradable instruments in total, CMC’s selection is tough to beat. 

In addition to their above-average selection, CMC also offers below-average spread pricing. The typical spread on a popular pair like EUR/USD is just 0.74 pips. For very high-volume traders, CMC’s rebate programs can further reduce these costs. 

CMC uses its own Next Generation platform, which is user-friendly and award-winning. There is no minimum deposit to get started. 

City Index

A popular broker with several trading platforms to choose from

City Index is a good choice for experienced Forex traders, due to its use of advanced trading platforms. It offers its own AT Pro platform, as well as the popular MetaTrader 4 (MT4) interface. There are also two beginner-friendly apps to utilize. 

Over 65 currency pairs can be traded at City Index. Spreads on popular pairs are around 1.1 pips, which is slightly higher than average. 

City Index is a good choice for traders who want their choice of multiple trading platforms, and who don’t mind paying a bit extra for the privilege. 

FXCM

A powerful platform for high-volume traders

FXCM is a popular choice for active FX traders who trade at a high volume. FXCM’s Active Trader account requires a £25,000 minimum deposit but offers more competitive spreads and advanced trading tools. 

Traders can choose between several platforms. MT4, ZuluTrade, Trading Station, and NinjaTrader are all offered. 

FXCM offers a normal account, with no minimum investment. However, this account is fairly lackluster – spreads are higher than average, and there are only around 39 currency pairs to trade. For these reasons, we only recommend FXCM for those who will utilize the Active Trader account style. 

Pepperstone

Useful social trading features, and an intuitive online trading platform

Pepperstone is a simple broker with a user-friendly interface. Its simplicity, combined with social trading features, makes it a popular choice for casual traders. 

There are around 60 currency pairs that can be traded on the platform. Pepperstone’s spreads are higher than average, at around 1.16 pips for popular currency pairing. However, there is no upfront commission. 

For higher-volume traders, Pepperstone’s “Razor” account has much lower spreads, balanced by a per-trade commission. Pepperstone is also known for fast execution on trades. 

There’s no minimum deposit required to open an account, and Pepperstone offers some learning resources and beginner-friendly tools. 

FP Markets

A moderate-cost broker known for rapid transaction speeds

FP Markets, or First Prudential Markets, is a large broker that is known for very fast execution speeds. For sophisticated traders, the speed at which an order is executed can be very important. For retail investors, it’s not as big of a factor. 

FP Markets also has good customer service, and a solid selection of 60+ currency pairs, as well as CFDs. That said, their pricing is not as competitive as some low-cost brokers on this list. A typical spread on EUR/USD, for example, is around 1.14 pips. 

IC Markets

A low-cost broker with commission-based accounts

IC Markets is a popular option among algorithmic traders and large-volume traders. It offers commission-based accounts, with very low spreads between buy and sell prices. The company has operations in Australia, Cyprus, and Seychelles. 

They offer trading in 60+ currency pairs, but only a few hundred CFDs. Select cryptocurrencies can be traded through CFDs, but the actual underlying asset cannot be purchased on IC Markets. 

On the downside, the research materials, Forex news, and analysis tools that IC Markets offers are somewhat lacking, compared to competitors.

The post Best Forex Brokers in Australia (2023) first appeared on Chamber of Commerce.

Small business owners now have many options, including business credit cards, business lines of credit, business term loans, and more. One of the simplest and often quickest options is to instead take out a personal loan and use it for your business expenses. 

A personal business loan is a loan issued to an individual, rather than a business entity. The loan can be used for any purpose, including funding business expenses. Most personal loans can be used for business purposes, but be sure to check the fine print of your bank’s terms. 

Like any other form of business financing, there are both advantages and disadvantages to using a personal loan to fund a business. Here are some considerations to keep in mind, and some insights on how personal loans stack up against other small business loans. 

Check out our complete guide to Small Business Loans

Advantages of business personal loans

Lower APRs than credit cards

For well-qualified borrowers, personal loans almost always have better interest rates compared to credit cards. That said, if you have moderate credit, you may pay a similar APR to a credit card – and if you have bad credit, you likely won’t get approved for a personal loan.

Flexible and versatile

Personal loans can be used for any purpose. And the issuing bank doesn’t really need to know what you’re spending every dollar on. Some solopreneurs and sole proprietors opt for personal loans as they allow for flexible coverage of both business and personal expenses. 

Ease of approval

Compared to traditional business loans, personal loans are generally easier to get approved for. The loan application can usually be done completely online, and qualifying is often easier than with a business loan. This is particularly true when it comes to a startup or new business. Without a record of revenue and several years in business, it can be tough to get approved for a business loan. With a personal loan, lenders look solely at your credit report and personal credit history. You won’t need to show a business plan, prove the eligibility of your business purchases, or show significant annual revenue in order to qualify. 

Disadvantages of business personal loans

No protection for your personal finances

If you have a LLC or corporate business structure, there will be some level of protection for your personal assets, should you default on loans. However, this is not the case with a personal loan, as it is tied directly to you as an individual, rather than your business entity. This is the biggest difference between personal loans and more traditional options like Small Business Administration loans (SBA loans).

Tax considerations

Some business loans qualify for specific business tax deductions, most notably on the interest payments made. However, because personal loans are not business-specific, they usually do not qualify for these tax breaks. Speak with your tax advisor to discuss the implications of this. 

Limited loan size & terms

Personal loans are typically smaller, and often shorter-term than traditional business loans. For small companies seeking startup capital, they present a versatile option – but for established businesses needing substantial funding, or long-term loans, personal loans likely won’t suffice. 

What to look for in a loan provider

When choosing a loan provider, these are the most important considerations to keep in mind:

1. Competitive APR

The specific annual percentage rate (APR) you are offered will vary depending on your personal credit score, and other factors. Personal loans can be anywhere from 6% to 36% interest, depending on creditworthiness and loan size. The available interest rate is likely one of the most important considerations when selecting a provider. You’ll likely have to go through at least part of the application process in order to learn what APR you may qualify for, but this will likely still be worth doing if you want to compare a few providers. For a thorough analysis, run the numbers to see how much the loan will cost you in the long run. This helps you analyze whether or not a relatively small difference in APR will make a substantial difference. 

2. Available loan terms

Personal loans tend to be available in terms between 24 months and 60 months (2 to 5 years). The term you should choose largely depends on your business and your expected repayment timeline. For many new companies, having a longer-term is attractive, as it gives young businesses more flexibility. Banks differ in the terms they offer, so seek out a provider that fits your needs. Online lenders may offer a wider variety of terms for those with good credit. 

3. Competitive fees

There will be various fees associated with almost any type of loan. Origination fees, application fees, late payment fees and prepayment fees can all tack on costs to your loan. Fortunately, personal loans often have fewer fees than traditional business loans – even so, you should compare costs at different providers. 

4. Maximum loan amount

Personal loans are often smaller than standard business loans. If your business needs substantial funding and needs to maintain cash flow with low monthly payments, be sure to shop around to see the maximum loan amount that you may be qualified for with various providers. If the amount doesn’t suffice, you may need to look into other financing options. 

5. Customer service

Choosing a loan provider with good customer service is important. Perhaps no issues will arise with your loan – but if they do, you will be thankful for a genuinely helpful customer support team. You can look at customer reviews of personal loan providers to gauge a company’s reputation. Small banks and credit unions are often known for great customer service, although online lenders may offer better repayment terms.

6. Unique perks

Some banks and financial institutions have various perks, such as rewards programs or member rebates. In some cases, it’s worth checking with your existing bank or credit card provider to explore loan options. 

Best personal business loan providers

There are many options when it comes to personal loans for business funding. The business lenders and personal loan providers below have been selected based on a combination of available APRs and loan terms, customer service, and feedback from past borrowers. 

Rocket Loans

Rocket Loans is an online financial services provider, specializing in personal loans and mortgages. Their personal loan terms specifically allow business use, so there are no issues with using Rocket Loans for a personal business loan.

Rocket Loans uses a streamlined, 100% online process to get you funded fast. In fact, qualified borrowers can actually get same day funding. You can get pre-approved within seconds to get instant loan offers – and preapproval will not affect your credit score. 

Rocket Loans details

• Personal loan amounts from $2,000 to $45,000
• Loan terms of 3 years or 5 years
• Estimated APR from 7.16% to 29.99%, depending on credit
• Origination fee ranges from 1% to 6% of the loan amount
• $15 fee for late fee/unsuccessful payment
• Minimum credit score of 640
• No prepayment penalty

Advantages

• Ultra-fast loan origination and funding
• Same-day funding available for qualified borrowers
• Competitive rates for borrowers with good credit
• No penalty for prepayment
• Autopay qualifies for a rate discount
• Pre-qualification is a soft credit check (and won’t affect your credit score)

Disadvantages

• Origination fee is mandatory; 1-6%
• Only two loan terms available; 3 or 5 years
• No options for co-signing or joint loans

Discover Personal Loans

Discover is a large financial institution that offers credit cards, savings accounts, personal loans, and more. As one of the largest lenders on this list, they can offer some of the most competitive rates. Also, they do not charge origination fees, which is very unique in the industry. They also have flexible repayment terms, spanning from 3 years to 7 years. 

Discover Personal Loans can be used for any purpose. “Business” is not an included category, but Discover has confirmed that personal loans may be used for business purposes.

Discover personal loans details

• Personal loan amounts from $2,500 to $35,000
• Loan terms of 3 to 7 years
• Estimated APR from 6.99% to 24.99%, depending on credit
• No origination fee
• Minimum credit score of 660
• No prepayment penalty

Advantages

• No origination fee (save 1-6% of the loan amount compared to competitors)
• Advanced mobile app to manage loan and monitor credit
• Wide variety of repayment terms
• Fast funding – as quick as the next business day

Disadvantages

• No options for co-signed or joint loans
• Requires higher credit scores than many competitors 

LendingClub

LendingClub is a peer-to-peer financing platform and microloan issuer. What that means is that you can borrow directly from investors, who fund these personal loans instead of a traditional bank. They specifically allow business usage for personal loans, so there is no issue with using LendingClub for small business funding. 

LendingClub’s application process is straightforward and fast. They offer personal loan terms of 3-5 years. They also support borrowers with fair credit, as their minimum credit score is 600 (many lenders require at least 640). 

LendingClub details

• Personal loan amounts from $1,000 to $40,000 (minimum loan amount varies by state)
• Loan terms of 3 to 5 years
• Estimated APR from 10.68% to 35.89%, depending on credit
• Origination fee ranges from 1% to 6% of the loan amount
• Late fee: $15 or 5% of payment, whichever is greater (15-day grace period included)
• Minimum credit score of 600
• No prepayment penalty

Advantages

• Get pre-qualified with a soft credit check (no impact to credit score)
• Get funded directly by individual investors
• Minimum credit score of 600; most lenders require 640+
• Offers debt consolidation loans
• Co-signed and joint loan options available

Disadvantages

• Rates are often higher than competitors
• Funding is slower due to the peer-to-peer model
• Origination fee of 1-6%

Avant

Avant is a loan issuer that offers easy personal loans online. They offer quick funding, with next-day funding for qualified borrowers. With Avant, you can borrow between $2,000 and $35,000 as a personal loan.

Avant is a good option for borrowers with below-average credit. They have a minimum credit score of 550, rather than the average of 600-640+. Of course, borrowers with low credit will pay higher interest rates – but at least Avant provides loan options for this type of borrower. 

Avant details

• Personal loan amounts from $2,000 to $35,000 (minimum loan amount varies by state)
• Loan terms of 2 to 5 years
• Estimated APR from 9.95% to 35.99%, depending on credit
• Origination/administration fee of up to 4.75%
• Late fee: $25 in most states
• Minimum credit score of 550
• No prepayment penalty

Advantages

• Fast funding (next business day)
• Soft credit pull for prequalification (no affect on your credit score)
• Supports borrowers with lower credit scores

Disadvantages

• Administration/origination fee of up to 4.75%
• Higher late fee than most competitors ($25)
• No options for co-signing or joint loans 

The post Best Personal Business Loans (2023) first appeared on Chamber of Commerce.

A merchant cash advance is a flat lump sum payment that will be paid off as a percentage of your daily credit or debit card sales. Thus, the more revenue you bring in, the faster the loan will be paid off. Some providers may offer a flat daily withdrawal payment, as well, regardless of revenue volume. 

Merchant cash advances (MCAs) are fast – you can often get funded in a week or less – and relatively easy to get approved for. Lenders look primarily at your firm’s daily credit card sales – and estimates of future credit card sales and receivables – to gauge your ability to pay back the loan. This type of financial product is popular in the service industry, including restaurants and coffee shops, as well as small retailers. 

Payments and loan amounts are calculated based on a factor rate, usually ranging from 1.2 to 1.5. For example, if you take out a $100,000 merchant cash advance at a factor rate of 1.4, that means you’ll need to repay $140,000 (1.4 x $100,000). If the payment amount is based on 10% of daily sales, the issuing lender will automatically take 10% of your sales until the loan is paid off. 

Pros & cons of a merchant cash advance

When considering any kind of business financing option, it’s good to weigh the advantages and disadvantages. Here’s how merchant cash advances stack up against other types of small business loans. 

Check out our complete guide to Small Business Loans

Advantages of a merchant cash advance

Unsecured

Most merchant cash advances are unsecured. This means that you don’t need to put up collateral in order to take out the loan, and should you be unable to repay, the bank can’t repossess your personal assets. Alternatives, including many business term loans, require collateral, which puts assets like your home or your car on the line. Many other forms of short-term loans are generally secured. 

Fast

Merchant cash advances require less paperwork to apply for, and far less back-and-forth with the lender. The issuing bank will primarily look at your credit/debit card revenue to gauge your ability to repay a loan. From start to finish, most businesses can be funded within a week or less. 

Payments tied to revenue

Most cash advances base your payment amount on a percentage of your daily, weekly, or monthly revenue – by taking, for example, 10% of your daily purchases. That means that if you have a particularly good month, you’ll pay off a bit extra on your loan. Have a slow week, and your payment will be a bit smaller. 

Available for entrepreneurs with bad credit

The application process for a merchant cash advance looks more at your business’ revenue, rather than its credit history – or your personal credit score. Thus, MCAs become an option for business owners who are unlikely to be approved for something like a term loan. 

Disadvantages of a merchant cash advance

High costs

The interest rates associated with merchant cash advances are much higher than most other styles of business funding. The loans are not typically advertised in terms of annual percentage rate (APR), but instead using a “factor rate”. However, if you do the math, you will find that a typical merchant cash advance may carry an implied APR of around 40% to as much as 350%, depending on the size of the loan and how quickly it’s paid off. 

Counterintuitive

In some ways, repaying a merchant cash advance is counterintuitive. If your business does well and revenue rises, you’ll need to make larger payments on the advance. And since you need to pay off a flat amount of fees, you’ll actually pay a higher APR the faster you pay off the MCA. For instance, if you pay off an advance in 6 months, the APR might be around 60% – pay it off in 12 months, and the APR will be only 30%. Thus, there’s no reward for paying off a loan early – quite the opposite, in fact. 

Cash flow risks

Most MCAs require substantial daily payments, which are based on a percentage of daily revenue from credit/debit card sales. For many small businesses, this repayment schedule can put substantial strain on cash flow. It can also create a debt-cycle problem, in which firms need to take out another advance shortly after paying off the first. 

What to look for in a loan provider

1. Good reputation

The merchant cash advance industry is not regulated in the same way as most financial products. Because of this, there are far more predatory lenders in the space, with very high fees and misleading language. To avoid these bad loans, it’s important to choose merchant cash advance companies with good reputations.

2. Reasonable fees

MCAs will rarely be a cheap option; however, the fees vary drastically from provider to provider. Remember, the costs for these advances are based on a factor rate, usually ranging from 1.2 to 1.5. Look out for other fees, as well. 

3. Range of loan amounts

Different lenders will offer different sizes of MCAs, ranging from as little as a few thousand to several hundred thousand. You’ll want to select a lender that offers an advance to fit your financial needs. Then again, for substantial loan sizes, MCAs are usually not an economical option. 

4. Good customer service

Working with a reputable company with good customer service is always a good idea. If any issues arise, you want the peace of mind to know that your issue will be handled. You can look to customer reviews to gauge the reputation of a company you are considering working with. 

5. Option for a fixed payment

The standard repayment method for an MCA is called hold back, and it’s taken as a percentage of daily credit card payments to your business. This means that your sales volume directly impacts the amount of your daily payment (in contrast to a traditional loan, which has standard flat monthly payments). However, some business cash advance providers offer the option for a flat, fixed daily payment. If this is preferable, be sure to keep an eye out for this feature. 

Best merchant cash advance providers

There are many companies offering merchant cash advances, but many of them are not worth your time. It’s very important to choose reputable MCA providers. The recommendations below are based on a combination of reputation, fees, customer service, and more. 

Rapid Finance

Rapid Finance is an online provider of business loans, merchant cash advances, and more. They have funded more than $2 billion in loans, and are well known for fast funding and competitive rates. For MCAs, Rapid Finance offers amounts of $5,000 to $500,000, with factor rates as low as 1.22. 

Rapid Finance provides fast, simple applications online, and can get your company funded in as little as a few days. They also have low requirements for businesses; you only need to show 3 months of business history minimum, and a 550 credit score. 

Rapid Finance details

• Merchant cash advances from $5,000 to $500,000
• Factor rate from 1.22
• Also offers options for bridge loan, small business loan, asset-based loan, SBA loan, and more.
• Requirements are low for MCAs; 3 months business history and 550 credit score

Advantages

• Huge range of loan options
• Low requirements
• Competitive fees
• Fast funding
• Good reputation

Disadvantages

• Fees higher than average for some borrowers

National Funding

National Funding is a business financing provider with a variety of loan options. They offer merchant cash advances of up to $250,000 and can get your business cash in as little as 24 hours. They offer same-day approvals, with funding delivered as quickly as the next business day. 

National Funding has very low requirements for their MCAs. Businesses need to show a minimum of $3,000 in monthly credit card sales and need to have 1 year of business history. 

National Funding details

• Cash advance of up to $250,000
• Factor rate from 1.17 to 1.36
• Rapid funding
• Also offers other types of business loans

Advantages

• No hidden fees or upfront costs
• Low requirements for business
• Competitive rates
• High maximum loan amounts

Disadvantages

• Requires 1 year in business 

Lendio

Lendio is an online financial services marketplace. It helps connect borrowers to lenders through an innovative market model. Instead of applying for a single vendor’s offerings, you apply with Lendio and are matched to dozens of different options. This helps you cast a wider net, helping to find the right funding option for your needs.

Lendio facilitates various loan styles, including merchant cash advances. The specific requirements, factor rates, etc. vary depending on the actual loan provider – but being able to see several options means that you’ll often find a good value. 

Lendio details

• Unique marketplace model gives you a variety of options 
• MCAs from $5,000 to $200,000
• Interest rates as low as 18%
• Loan terms up to 2 years
• Specific terms vary by lender

Advantages

• Easily compare different options in one place
• Fast funding in as little as 24 hours
• Options specifically tailored to merchant cash advances
• Access to a nationwide network of over 75 lenders

Disadvantages

• Rates are for some borrowers
• Specific requirements vary greatly between lenders 

Funding Circle

Funding Circle is a provider of business loans and merchant cash advances. They have helped over 90,000 small business owners meet their business funding needs, through the issuing of more than $12 billion of loans. Needless to say, Funding Circle is a very reputable company to work with. 

Funding Circle offers merchant cash advances in the amounts of $5,000 to up to to $400,000. Factor rates are very competitive – as low as 1.15 for qualified borrowers. And, like all Funding Circle products, the application process is very fast, and funds can be transferred as soon as the next business day. 

Funding Circle details

• MCAs from $5,000 to $400,000
• Anticipated duration between 3 and 18 months
• Factor rates from 1.15
• Also offers many other loan types, including SBA loans

Advantages

• Low requirements
• Very competitive factor rates for well-qualified businesses
• Quick funding as soon as next business day
• Specialty loans available, including SBA loans

Disadvantages

• Some loans require personal guarantee and/or business lien

Square Capital

Square Capital provides working capital for merchants who use Square for credit card processing. If you’re already using Square to process credit card transactions, the process will be very simple. You can use your existing Square merchant account, and simply need to go through a quick application process to get funding. So far, Square Capital has funded more than 400,000 different small businesses, largely with small to medium-sized loans. 

Square provides quick, customized offers to merchants, based on their Square credit card sales. Merchants can easily select their advance amount in order to gauge how much the advance will cost. Square Capital has very competitive rates, but it’s limited in that it’s only available for Square users. 

Square Capital details

• Cash advances from $300 to $100,000
• Factor rates from 1.10 to 1.16
• Next-day funding available
• Automatic repayments based on Square credit card sales

Advantages

• Very competitive rates
• Seamless integration with Square platform
• Low minimum requirements
• Very low minimum amount makes it easy to cover small gaps in cash flow

Disadvantages

• Only available to merchants who use Square for payment processing

The post Best Merchant Cash Advance Lenders (2023) first appeared on Chamber of Commerce.

A business term loan is a standard loan product, in which the business borrows a specific amount of money, paying it back in equal installments over a number of years. Business term loans function in a similar way to traditional car loans or mortgages, with the obvious difference of being strictly for business use. Some – but not all – business term loans are Small Business Administration loans, also known as SBA loans, which are guaranteed by the Federal government. 

Business term loans are a popular option for growing businesses, as they allow firms to raise significant amounts of capital, and enjoy long repayment terms. They generally offer competitive interest rates but can be more difficult to get approved for than some alternatives. 

Pros & cons of a business term loan

When exploring business financing options, it is wise to consider the advantages and disadvantages of each funding style. Here are the pros and cons of business term loans, and how they stack up against other small business loans. 

Check out our complete guide to Small Business Loans

Advantages of business term loans

Substantial loan limits

Small business term loans can help raise substantial capital in a lump sum; potentially up to $5 million, depending on the scale of your business and your credit history. This makes them a good choice for established firms that need money to scale or invest in expansions, new products, etc. 

Long repayment periods

For SBA-backed term loans, repayment periods can stretch as far as 25 years. These long term business loans give firms the flexibility to think about the big picture, planning years or even decades ahead. Longer terms also offer lower payments, helping small business owners maintain cash flow. 

Small business administration (SBA) backing

Many (but not all) business term loans are also Small Business Administration loans. These term loans are backed by the federal government, meaning the government guarantees the loan and will step in if the business is unable to pay. This guarantee means banks are more willing to loan funds to a wider variety of businesses, and often at lower interest rates. A business term loan isn’t always an SBA loan, however – only certain loan issuers offer this class of financial product. 

Builds business credit profile

Business term loans are issued to a business entity. Making on-time payments can help strengthen your business’ credit profile, making it easier (and cheaper) to get financing in the future. Business loans may be issued based on a combination of your personal and business credit profile, but they primarily help to build a business credit history.

Disadvantages of business term loans

Limited flexibility

Business term loans are fairly rigid in their structure. The loan is a flat amount, and often there is no option to obtain additional funding (like you could with a business line of credit). The payments are also a set amount per payment period (often weekly, biweekly, or monthly payments), and they begin immediately after funding. 

Stricter requirements

Many business term loans, and particularly SBA-backed loans, carry strict requirements. Firms need to be in business for a certain amount of time and be able to prove a certain level of revenue or profit. The specific requirements vary depending on the lender. 

Slow funding

Business term loans can take a while to apply for, get approved for, and actually receive. For this reason, many business owners choose to have a line of credit or business credit card to cover rapid expenses, and business term loans to fund more long-term investments. 

Collateral requirement

Some term loans require collateral – such as equipment or real estate – to back the loan. Others ask for a personal guarantee or a business lien. This means that the lender can sell the collateral if the business fails to pay off the loan. Depending on loan size, creditworthiness, and personal credit score, collateral may or may not be required. 

What to look for in a loan provider

1. Competitive interest rates

Because business term loans tend to be relatively large and often long-term, the interest rate (APR) can make a huge difference in the total cost of the loan. For large rounds of funding, even a small difference in rates can make a big difference over the years. Depending on a number of factors, the annual percentage rate on a term loan can vary from as low as 6% to as high as 99%. 

2. Range of loan terms

Term loans can range from as little as a few years to up to 25 years. Depending on your firm’s needs, selecting the right financial institution is key. Many traditional banks offer loan terms of up to 10 years, while SBA loan issuers can fund loans with terms of up to 25 years. 

3. Competitive fees

Most business term loans have various fees that applicants should be aware of. Origination fees, application fees, prepayment penalties, late payment fees, and more can all add substantial cost to the loan over time. While all providers charge some fees, by comparing different loan issuers you can ensure you’re getting the best deal possible. That said, be sure to look at the big picture – choosing a provider with lower fees but a higher APR may not save you any money in the long run. 

4. Maximum loan amount

Applicants should check if the financial institution offers loan amounts that suit their needs. Some term loans can be issued for up to $5 million, but many providers focus on small to midsize loans of up to a few hundred thousand. Shop around to explore your options – but realize that the size and financial health of your business will also affect how much credit a bank will actually extend to you.

5. Customer service

Business term loans are often a long-term affair. Because of this, you should treat your bank like a partner – and you should always be selective in selecting new partners! By focusing on feedback about customer service (largely from customer reviews), you can get a feel for how helpful a bank will be, should any issues arise. 

Best business term loan providers

Business term loans are available from traditional banks, credit unions, and online lenders. There’s a lot to consider when choosing a provider, but the recommendations below are based on a combination of available terms/APRs, customer service ratings, fees, and ease of use for business owners. 

Biz2Credit

Biz2Credit is an online loan provider for small businesses. They specialize in small to medium-sized loans and have issued more than $3 billion worth of loans to more than 20,000 small businesses. 

Biz2Credit uses a simple online application process to get your business funded fast. Term loans can be funded within as little as 72 hours, which is much faster than most traditional bank loans. 

Biz2Credit details

• Business term loans from $25,000 to $250,000
• Terms from 12 months to 36 months
• Estimated APR as low as 8.99% 
• Most applicants have a minimum credit score of 660
• Most applicants have at least 18 months in business and $250k in annual revenue

Advantages

• Very fast funding – as little as 72 hours
• Get approved in as little as 24 hours
• Competitive rates for short-term loans (1-3 years)
• Dedicated support specialists to guide you through the process
• Excellent customer feedback
• A versatile option for small to midsize loans

Disadvantages

• Relatively low maximum loan amount ($250,000 for term loans)
• Limited term options (1-3 years)

Rapid Finance

Rapid Finance is an online provider of business financing. They offer a wide variety of financing solutions, from term loans to merchant cash advances. They offer a wide range of loan sizes, stretching from as little as $5,000 to as much as $1,000,000. Rapid Finance has currently funded more than $2 billion in small business loans, helping thousands of entrepreneurs fund their dreams. 

As the name suggests, Rapid Finance can get your business funded fast. Once approved, funds can be transferred to you in a matter of hours. With Rapid Finance, there is much less processing time and red tape, when compared to traditional banks. 

Rapid Finance also offers Small Business Administration (SBA) loans. These loans can be issued in amounts of up to $5.5 million.

Rapid Finance details

• Business term loans from $5,000 to $1 million
• Terms from 3 months to 60 months
• SBA loans of up to $5.5 million; terms of up to 25 years
• Choice of a bridge loan, small business loan, asset-based loan, SBA loan, and more.
• Requirements vary depending on the loan type
• APR varies depending on loan type and credit profile

Advantages

• Huge range of loan options
• Terms from 3 months to 25 years, depending on loan type
• Offers SBA loans, which are a great long term loan option
• Fast funding
• Offers both secured loans and unsecured loans
• Flexibility in loan payment frequency (daily, weekly, or monthly)

Disadvantages

• More stringent requirements for some loan products
• Available rates vary significantly by applicant and type of loan; upfront rate transparency is limited 

OnDeck

OnDeck is a small business financing provider with a streamlined selection of financial products to suit your business needs. They are a large scale provider, having issued more than $13 billion worth of business loans. OnDeck also has a great reputation; they hold an A+ rating with the BBB and have earned a 4.9/5 average rating on TrustPilot. 

OnDeck mainly issues small business term loans and business lines of credit. They specialize in short-term business loans, with terms of up to 18 months. They serve a wide variety of customers and are one of few providers to offer business funding to those with mediocre credit (although loan rates will be higher for these borrowers).

OnDeck details

• Business term loans of $5,000 to $250,000
• Loan terms of up to 18 months
• Minimum credit score of 600
• Estimated APR from 9.9% to 99%
• Requires 1 year in business minimum

Advantages

• Loyalty benefits for repeat clients helps with refinancing 
• Extends working capital to those with moderate credit scores
• No prepayment penalties for qualifying borrowers
• Transparent pricing and fees
• Less paperwork than many lenders

Disadvantages

• Short maximum loan length (18 months)
• Limited selection of financial products
• Requires frequent payments (most are daily or weekly)
• Requires personal guarantee and business lien 
• Higher interest rate for many borrowers

Funding Circle

Funding Circle is a business loan provider with several products to fit your financing needs. They have served over 90,000 small businesses worldwide and provided funding exceeding $12 billion. They offer fast funding, a wide variety of loan terms, and competitive rates for many borrowers. 

Funding Circle’s main selling point is flexibility. They offer terms as short as 3 months and as long as 10 years – a much wider range than most competitors. And they also have specialty loan products, like SBA loans, which may be a better fit for some firms. 

Funding Circle details

• Business term loans from $5,000 to $500,000
• Estimated APR 12.18-36.00%
• Terms from 3 months to 10 years
• Minimum credit score of 660

Advantages

• No minimum revenue requirement for loan applicants
• Wide variety of loan term lengths
• Quick application and funding 
• Also offers SBA loans and other financial products

Disadvantages

• Requires personal guarantee and business lien
• Higher rates for some borrowers

BlueVine

BlueVine is a business loan provider that also offers other financial services, like a business checking account. It’s a good option for newer businesses, as it offers a wide variety of tools. The checking account in particular is attractive; it earns 1% interest on balances up to $100,000, and there are no fees.

BlueVine is also a good option for newer companies because of their loan requirements. They require firms to be in business for only 6 months before applying for a loan, while most competitors require 1-3 years.  

BlueVine details

• Business term loans of up to $250,000
• Rates as low as 4.8%
• Terms from 6 months to 12 months
• Minimum credit score of 600
• Requires 6 months in business and $10,000 in monthly revenue

Advantages

• Requires only 6 months in business to apply
• Low revenue requirement 
• Easy application process and fast funding
• Also offers other financial products, like rewards checking

Disadvantages

• Requires personal guarantee 
• Shorter-term loans generally have higher rates

The post Best Small Business Term Loans (2023) first appeared on Chamber of Commerce.

The post Best Small Business Equipment Financing Lenders (2023) first appeared on Chamber of Commerce.

Business owners have many funding options – term loans, SBA loans, lines of credit, cash advances, business credit cards, and more. One popular option is taking out a short term business loan. 

A short term business loan is a lump-sum loan taken out for a relatively short period. There is no “official” term that qualifies as “short”, but generally speaking, loans from around 3 months to 2 or 3 years are often considered short term. 

Short term loans are a popular option for several reasons. For one, they can be issued and funded quickly, allowing firms to jump on business opportunities. They also don’t lock companies into decades of payments, making them attractive for newer companies who don’t have a clear idea of their future revenues. And finally, they are generally far cheaper than credit cards, or even lines of credit in some cases. 

Pros & cons of a short term business loan

When exploring any sort of funding option, it’s wise to compare both advantages and disadvantages. This section explores the pros and cons of short term loans, and how they compare against other small business loan types.  

Check out our complete guide to Small Business Loans

Advantages of a short term business loan

Rapid funding

Unlike large, long-term loans, short term loans can generally be approved and funded rapidly. Some online lenders can get funds to your business in just a few days – which is a huge difference compared to the weeks or even months it can take to get funded with traditional bank loans. For short-term opportunities, firms often need to move quick – and these loans help enable that nimbleness. 

Lower requirements

Some short-term loans have fewer requirements for businesses, compared to larger traditional loans, SBA loans, etc. Generally, these requirements come in the form of personal credit score, business credit score, monthly/yearly revenue, and time in business. Most issuers require at least 6 months to 1 year in business, with proof of revenue, but these requirements are lower than many loan types. 

Predictable costs

Term loans come with set daily, weekly, or monthly payments. You get a lump sum upfront and pay it off over a set period of time in a predictable, set way. The repayment period is usually a few months to a few years. This helps entrepreneurs meet their financial business needs while having stable and predictable costs.

Builds business credit profile

Taking out a short-term small business loan and making on-time payments can help strengthen your personal credit and your business’ credit profile. This helps give your business credibility, and also makes it far easier to get approved for loans in the future. 

Cheaper than alternatives

Short-term loans are often cheaper (in the form of lower APRs and fewer fees) than some alternatives. For instance, some small business owners might reach for their business credit cards in order to fill short-term financing needs. However, credit cards offer far higher interest rates. Other financing options, like merchant cash advances, invoice financing, or a business line of credit, can be cheaper or more expensive – this depends largely on the business’ credit rating. Be sure to consider total cost, including loan application fees and other expenses, when comparing different loan styles. 

Disadvantages of a short term business loan

Collateral requirements

Many term loans require the applicant to put up some form of collateral, usually in the form of an asset that the lender can sell if the borrower defaults. Others require a personal guarantee, which ties your personal assets to your business loan. 

Limited flexibility

Term loans have set payment requirements (daily, weekly, or monthly). Payments generally begin immediately. While this does provide a predictable cost schedule, it also limits flexibility in some ways. 

Higher APRs

Shorter-term loans may have higher APRs than longer-term loans for similar applicants. Most lenders prefer longer-term loans, as they lock in profits for years to come; thus, short-term options are sometimes more expensive. 

What to look for in a loan provider

1. Competitive interest rates

Interest rates (APR) can make a huge difference in the long-term costs of business financing. Even a relatively small difference in APRs can make a substantial impact on total costs. Be sure to compare different providers to ensure you’re getting a good deal. Interest rates vary hugely, depending on creditworthiness and loan size/style – from as low as 6% to as high as 99%. 

2. Range of loan terms

How “short term” do you need? Most lenders that offer term loans have minimum term lengths of 3 months to 12 months. Most have a maximum length of a few years. Be sure to look for a term that fits your needs – and also look into prepayment penalties, should you decide to pay off the loan early. 

3. Competitive fees

All business loans will have some fees associated with them, in addition to the interest charged. Application fees and origination fees are universal, but the actual size of these fees varies substantially. Prepayment penalties are important to watch out for, as well – some lenders penalize you if you try to pay off the loan ahead of schedule. Compare fees closely, but also consider APR and total cost – you likely want to avoid choosing a lender with lower fees, but a higher APR. 

4. Maximum loan amount

How much funding do you need to meet your business goals? Short term loans are generally small to medium-sized, but there is quite a range depending on the loan provider. Typically, the minimum amounts are around $5,000 to $25,000, and the maximum amounts are around $100,000 to $250,000. Some issuers offer far higher limits, however. Applicants should keep an eye on maximum loan amounts, but should also be realistic about the likelihood of getting approved for larger loans. 

5. Customer service

You should look for a loan provider or bank with a good reputation, and good marks for customer service. If you have an existing relationship with a bank, that may be a good place to start – but be sure to check their terms and interest rates closely. For online lenders, you can read through customer reviews to get a feel for the overall reputation of a company. 

Best short term business loan providers

Short term business loans are available from online lenders, local banks, credit unions, and other financial institutions. While it pays to shop around, online lenders often offer the best value, as they have lower costs. Some of the best short term business loan options are listed below. The recommendations are based on a combination of loan requirements, available interest rates, minimum/maximum loan amounts, and other key factors. 

Rapid Finance

Rapid Finance is a loan issuer for small businesses, providing term loans, lines of credit, SBA loans, and more. Their wide variety of financial solutions makes them a good choice for businesses of all shapes and sizes. Loans can be issued for as little as $5,000, and as much as $1 million. In fact, Small Business Administration (SBA) loans can be issued for up to $5.5 million (although SBA loans are not typically used for short-term loans). 

Rapid Finance provides fast approval and even faster funding. Once you’re approved for a loan, funds are transferred within just a few hours. You can get a loan for as short as 3 months, or as long as 5 years, making Rapid Finance a very versatile choice. 

Rapid Finance details

• Short term business loans from $5,000 to $1 million
• 3 month to 60 month terms
• Also offers Small Business Administration loans (generally for longer-term loans)
• Offers many other financial products
• Requirements for applicants vary depending on the type of loan
• APR varies depending on credit history and loan type

Advantages

• Terms from 3 months to 55 years
• Rapid approval and funding
• Secured and unsecured loans available
• Flexibility in repayment terms
• Wide choice of loan size and term length

Disadvantages

• Some loan products carry more stringent requirements
• Rate transparency is limited – you must start the application process to see rates

Biz2Credit

Biz2Credit is a popular online loan provider for businesses of all sizes. They have helped more than 20,000 small businesses achieve their goals, by funding more than $3 billion worth of loans. They offer terms between 12 and 36 months, making them a great choice for short- and medium-term small business loans. 

The application process for Biz2Credit is simple and fast. In fact, you can get approved and fully funded in as little as 72 hours. Compare that to the weeks-long process at a traditional bank, and you can see why so many entrepreneurs are choosing Biz2Credit for their financing needs. 

Biz2Credit details

• Short term business loans from $25,000 to $250,000
• Loan lengths from 12 months to 36 months
• APR as low as 8.99% 
• Requires minimum credit score of 660
• Most applicants have 18+ months in business
• Most applicants have $250k in annual revenue

Advantages

• Rapid funding – as quick as 72 hours
• Approval in as little as 24 hours 
• Competitive rates
• Excellent customer ratings and reviews
• A great option for short- to medium-term loans 

Disadvantages

• Relatively low maximum loan amount
• The shortest loan option is 1 year

OnDeck

OnDeck is a large scale provider of small business financing products. They have served thousands of small businesses, and have currently funded more than $13 billion in loans. Over their years in the industry, OnDeck has earned a stellar reputation, with a 4.9/5 star TrustPilot rating, and an A+ rating with the Better Business Bureau.

OnDeck specializes in short term business loans, making them a great fit for firms looking for rapid, short- to medium-term funding. They are also a good choice for business owners with moderate credit, as they have lower credit requirements than many lenders.  

OnDeck details

• Short term business loans of $5,000 to $250,000
• Loan terms from 3 months to 18 months
• Minimum credit score of 600
• Estimated APR from 9.9% to 99%
• Requires minimum of 1 year in business 

Advantages

• Unique loyalty program rewards repeat business
• Available to those with moderate credit scores
• Transparent fees and pricing
• Less paperwork, and quicker than many lenders
• Good option for quick working capital and loans
• No prepayment penalties

Disadvantages

• Limited selection of loan types
• Frequent payments required
• Requires a personal guarantee and a business lien 

BlueVine

BlueVine is an online provider of loans, lines of credit, and even business checking accounts.It aims to provide a one-stop-shop for newer companies looking for financial services. If you’ve recently started a business, BlueVine’s checking account is well worth looking into – it earns 1% interest on up to $100,000, there are no fees, and it comes with other useful perks.

BlueVine’s loans are also attractive, particularly for newer companies. They require businesses to have only 6 months of history, rather than the 1-3 years required by most lenders. 

BlueVine details

• Short term business loans of up to $250,000
• Rates as low as 4.8%
• Terms from 6 months to 12 months
• Minimum credit score of 600
• Requires $10,000 in monthly revenue and 6 months of business history

Advantages

• Firms require only 6 months of business history to apply
• Low revenue requirement ($10k/month)
• Fast funding
• Also offers rewards checking and other financial products 

Disadvantages

• Requires a personal guarantee 
• Shorter-term loans generally have higher interest rates

Funding Circle

Funding Circle is a popular option for business loans, having served more than 90,000 clients so far (and having issued more than $12 billion worth of loans). Terms are flexible, funding is fast, and requirements are relatively low. 

The main selling point of this service is its flexibility. You can get a loan for as short as 3 months, or as long as 10 years – making it one of the most versatile loan options on this list. In addition to standard term loans, Funding Circle also offers specialty products, including Small Business  Administration loans. 

Funding Circle details

• Short term business loans from $5,000 to $500,000
• Estimated APR between 12.18 and 36.00%
• Term options from 3 months to 10 years
• Minimum credit score of 660
• No revenue requirement

Advantages

• There is no specific revenue requirement for applications
• Versatile selection of loan products and loan terms
• Application is quick and straightforward
• Fast funding if approved

Disadvantages

• Loans require a personal guarantee and business lien
• Potentially higher rates for some borrowers

The post Best Short Term Business Loans (2023) first appeared on Chamber of Commerce.