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. Whether it is a short term loan or an installment loan you need, there are loans you can apply over the Internet which are known as online loans.
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. 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. Whether justified or not, they think that lending to small business remains a risky proposition. In addition, the process of lending to small businesses is as exhaustive as that of bigger businesses but with a smaller payoff. Because of these reasons, only a small percentage of small businesses can qualify for bank loans nowadays.
This is where online business loans become an option. There are online lenders in the lending marketplace to fill the void left by commercial banks that won’t open up credit for 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.
The reason for this is that online business lenders are not banking institutions that have to comply with a number of government regulations that slow down the loan approval process. No government red tape means no paperwork. You do not waste time looking for and gathering documents as the lender won’t need them in processing 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. 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. There are all kinds of online business loans depending on where it will be used.
Furthermore, online lenders can offer an assortment of loan packages depending on what your small business needs. 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.