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Advantages of Online Business Loans
Now that you are ready to start your own business that requires some funding, there is no need to limit your options to traditional banks. 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. Majority of small business loans are still provided by commercial banks today even though it is quite difficult to avail of them.
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. It does not help that the small business lending process is just as exhaustive as that of bigger business but with a lower payoff. Nowadays, only a limited number of small businesses are 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. 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?
Applying for a regular bank loan has not been characterized as a speedy 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. 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 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 do not have to limit yourself to the usual loans. 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.
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