Reasons to Choose Online Business Loans
In case you are an entrepreneur who is looking for capital to jump-start your business, you may want to look beyond traditional banks for your funding needs. There are loans you can apply for over the Internet which are called online loans that include short term loans and installment loans.
Ten years ago, the rarity of online business loans did not make it a viable alternative for borrowers. Instead, conventional banks were the norm when small business owners were in need of funding. Today, the lion’s share of small business loans are still extended by established banks even though availing of one is easier said than done.
There are reasons why commercial banks tighten access to credit for small businesses. Rightly or wrongly, they still think lending to small businesses is a risky proposition. It does not help that the small business lending process is just as exhaustive as that of bigger business but with a lower payoff. The reality is that only a small percentage of small business today can be approved for bank loans.
This is where online business loans can be helpful. Online lenders are in the lending marketplace to serve small enterprises that were not approved for bank credit. If you applied for a bank loan for your startup business and was declined, you may want to consider an online loan. Below are the distinguishing characteristics of an online business loan compared to a bank loan.
Anyone who has tried processing an application for a regular bank loan knows that it can take days before the results are known. Applying to an online lender, on the other hand, guarantees a much, much faster process.
The reason for this is that online business lenders are not banking institutions that have to comply with a number of government regulations that slow down the loan approval process. That means online loan processing will also require no paperwork. There is no need to look for and gather documents as the lender won’t require them in order to process your application. And like most things online, the use of technology of online business loans will speed up things significantly.
The business loans offered by regular banks are very traditional such as term loans, credit cards, and lines of credit. On the other hand, online business lenders can adapt their loan products according to your needs. You do not have to limit yourself to the usual loans. There is a variety of online business loans modified for different purposes.
In addition, online business loans come in varying amounts subject to how much you need for your small business. While most banks won’t lend for less than R250,000, online lenders can lend from R5,000 to R250,000.