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.
Online business loans are not that common and a viable alternative ten years ago. Conventional banks were still the preferred source of funding by small business owners. 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. Nowadays, only a limited number of small businesses are approved for bank loans.
This is where online business loans can be helpful. 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 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. 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. This also means that there is no paperwork required in your application. 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.
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 do not have to limit yourself to the usual loans. There are all kinds of online business loans depending on where it will be used.
In addition, online business loans come in varying amounts subject to how much 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.
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