A Guide to Online Business Loans
In this day and age, traditional banks are not your sole options when you are searching for capital to fund your own business. 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. Small business owners preferred to go to conventional banks for their capitalization needs. Majority of small business loans are still provided by commercial banks today even though it is quite difficult to avail of them.
There are reasons why commercial banks tighten access to credit for small businesses. Whether justified or not, they think that lending to small business remains 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 can be helpful. 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 makes an online business loan different from a bank loan?
If you had experienced applying for a regular bank loan, then you know that it is a slow-moving process. This is different from applying to an online lender wherein the process is much, much faster.
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. 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.
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. 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.
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