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. There are loans you can apply for over the Internet which are called online loans that include short term loans and installment loans.
Online business loans are not that common and a viable alternative ten years ago. Instead, conventional banks were the norm when small business owners were in need of funding. 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. 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.
This is where online business loans become an option. 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 makes an online business loan different from a bank 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.
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. 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.
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 are not bounded to old loan offerings. There is a variety of online business loans modified for different purposes.
Furthermore, online lenders can offer an assortment of loan packages depending on what your small business needs. While many bank loans won’t settle for less than R250,000, online business loans can be from R5,000 to R250,000.