Advantages of Online Business Loans
In this day and age, traditional banks are not your sole options when you are searching for capital to fund your own business. You can now apply for short term loans, installment loans, or any loan over the Internet which is known as online loan.
Online business loans are not that common and a viable alternative ten years ago. Conventional banks were still the preferred source of funding by small business owners. Majority of small business loans are still provided by commercial banks today even though it is quite difficult to avail of them.
Commercial banks tend to tighten access to credit for small businesses because of the following reasons. The number one reason is that they consider lending to small business a high-risk investment. 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 become an option. Online lenders are in the lending marketplace to serve small enterprises that were not approved for bank credit. In case your bank loan application for your startup business was declined , you may want to look at an online loan. So what makes an online business loan different from a bank loan?
Applying for a regular bank loan has not been characterized as a speedy process. This is different from applying to an online lender wherein the process is much, much faster.
Because they are not banking institutions, the online business lenders do not have to conform with the list of government regulations that slow down the loan approval process. No government red tape means 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. Online business loans, on the other hand, afford you some flexibility when it comes to choosing the loan product that will suit your need. You are not bounded to old loan offerings. Depending on your purpose, there is an online business loan that corresponds to your needs.
There is also a range of loan sizes online lenders offer depending on the amount you need for your small business. While many bank loans won’t settle for less than R250,000, online business loans can be from R5,000 to R250,000.