Reasons to Choose 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.
Borrowers from ten years ago would not find online business loans a viable alternative for their needs. Conventional banks were still the preferred source of funding by small business owners. 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.
Commercial banks tend to tighten access to credit for small businesses because of the following reasons. Whether justified or not, they think that lending to small business remains 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. Because of these reasons, only a small percentage of small businesses can qualify for bank loans nowadays.
Thankfully, there are online business loans to fill the slack. Online lenders are in the lending marketplace to serve small enterprises that were not approved for bank credit. 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?
Anyone who has tried processing an application for a regular bank loan knows that it can take days before the results are known. 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. You do not need to spend a lot of time gathering documents the same way the lender will not spend a lot of time processing them. 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. 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 do not have to limit yourself to the usual loans. There are all kinds of online business loans depending on where it will be used.
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.
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