Reasons to Choose 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. You can now apply for short term loans, installment loans, or any loan over the Internet which is known as online loan.
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. 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.
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. 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. 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. What commercial banks won’t serve, online lenders are there to extend credit to small enterprises. 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. Try applying to an online lender and you will notice the difference in how much faster the process is done.
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 because it is done online, the processing of your small business loan application will be considerably quicker.
With conventional banks, you will be offered common business loans such as term loans, credit cards, and line of credit. On the other hand, online business lenders can adapt their loan products according to your needs. You are not bounded to old loan offerings. There are all kinds of online business loans depending on where it will be used.
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.