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. 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. Instead, conventional banks were the norm when small business owners were in need of funding. 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.
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. 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. If you applied for a bank loan for your startup business and was declined, you may want to consider an online loan. So what are the significant differences between a bank loan and an online business 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.
Because they are not banking institutions, the online business lenders do not have to conform with the list 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 done online, the processing of your small business loan application will be considerably quicker.
Regular banks tend to offer term loans, credit cards, lines of credit and other traditional business loans. Online business loans, on the other hand, afford you some flexibility when it comes to choosing the loan product that will suit your need. Your choices are not restricted to the customary loan offerings. There is a variety of online business loans modified for different purposes.
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.
Supporting reference: Visit This Link