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. 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. Small business owners preferred to go to conventional banks for their capitalization needs. 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. 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.
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. In case your bank loan application for your startup business was declined , you may want to look at an online loan. So what are the significant differences between a bank loan and an online business loan?
Applying for a regular bank loan has not been characterized as a speedy process. This is different from applying to an online lender wherein the process is much, much faster.
Because they are not banking institutions, the online business lenders do not have to conform with the list of government regulations that slow down the loan approval process. That means online loan processing will also require no paperwork. You do not waste time looking for and gathering documents as the lender won’t need them in processing your application. And because it is online, expect the processing time of your small business loan application to speed up considerably.
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. Depending on your purpose, there is an online business loan that corresponds to your needs.
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.
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