Reasons to Choose 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. You can now apply for short term loans, installment loans, or any loan over the Internet which is known as online loan.
Ten years ago, the rarity of online business loans did not make it a viable alternative for borrowers. Conventional banks were still the preferred source of funding by small business owners. 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.
What are the reasons commercial banks make it tough for small businesses to access credit? 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 become an option. What commercial banks won’t serve, online lenders are there to extend credit to small enterprises. An online loan may be worth your consideration if your application for a bank loan for your small business was rejected. So what are the significant differences between a bank loan and an online business loan?
If you had experienced applying for a regular bank loan, then you know that it is a slow-moving process. Try applying to an online lender and you will notice the difference in how much faster the process is done.
This is because alternative lenders such as those offering online business loans do not have to deal with a number of government regulations that banking institutions have to follow. This also means that there is no paperwork required in your application. There is no need to look for and gather documents as the lender won’t require them in order to process your application. And because it is done online, the processing of your small business loan application will be considerably quicker.
With conventional banks, you will be offered common business loans such as term loans, credit cards, and line of credit. With online business lenders, you will have some flexibility in choosing your loan product depending on your need. You are not bounded to old loan offerings. There is a variety of online business loans modified for different purposes.
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.
Cited reference: helpful hints