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. There are loans you can apply for over the Internet which are called online loans that include short term loans and installment loans.
Borrowers from ten years ago would not find online business loans a viable alternative for their needs. Instead, conventional banks were the norm when small business owners were in need of funding. 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? The number one reason is that they consider lending to small business a high-risk investment. In addition, the process of lending to small businesses is as exhaustive as that of bigger businesses but with a smaller payoff. 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. 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. This is different from applying to an online lender wherein the process is much, much faster.
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. 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 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. 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 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. If a bank won’t consider processing loans for less than R250,000, online lenders will do it for you from R5,000 to R250,000.