Advantages of Online Business Loans
In case you are an entrepreneur who is looking for capital to jump-start your business, you may want to look beyond traditional banks for your funding needs. 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.
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. 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.
This is where online business loans can be helpful. What commercial banks won’t serve, online lenders are there to extend credit to small enterprises. If you applied for a bank loan for your startup business and was declined, you may want to consider an online loan. So what makes an online business loan different from a bank 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.
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 need to spend a lot of time gathering documents the same way the lender will not spend a lot of time processing them. And like most things online, the use of technology of online business loans will speed up things significantly.
Regular banks tend to offer term loans, credit cards, lines of credit and other traditional business loans. With online business lenders, you will have some flexibility in choosing your loan product depending on your need. You do not have to limit yourself to the usual loans. Depending on your purpose, there is an online business loan that corresponds to your needs.
Furthermore, online lenders can offer an assortment of loan packages depending on what your small business needs. While most banks won’t lend for less than R250,000, online lenders can lend from R5,000 to R250,000.