A Guide to 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. Small business owners preferred to go to conventional banks for their capitalization needs. 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.
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. The reality is that only a small percentage of small business today can be approved for bank loans.
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 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 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. 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.
Furthermore, online lenders can offer an assortment of loan packages depending on what your small business needs. 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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