Advantages of Online Business Loans
Now that you are ready to start your own business that requires some funding, there is no need to limit your options to traditional banks. 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. Small business owners preferred to go to conventional banks for their capitalization needs. Fast forward to today and commercial banks still lead the way when it comes to providing credit even though regular banks loans are very challenging to secure.
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. There is also the notion that the process of extending credit to small businesses is just as laborious as lending to bigger businesses but with lower returns. The reality is that only a small percentage of small business today can be approved for bank loans.
Thankfully, there are online business loans to fill the slack. What commercial banks won’t serve, online lenders are there to extend credit to small enterprises. 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. Applying to an online lender, on the other hand, guarantees a much, much faster process.
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. That means online loan processing will also require no paperwork. You do not waste time looking for and gathering documents as the lender won’t need them in processing your application. And because it is online, expect the processing time of your small business loan application to speed up considerably.
Regular banks tend to offer term loans, credit cards, lines of credit and other traditional business loans. On the other hand, online business lenders can adapt their loan products according to your needs. Your choices are not restricted to the customary loan offerings. Depending on your purpose, there is an online business loan that corresponds to your needs.
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.