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Advantages of 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. There are loans you can apply for over the Internet which are called online loans that include short term loans and installment 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.

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. 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. 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. Below are the distinguishing characteristics of an online business loan compared to a bank loan.

Fast cash

If you had experienced applying for a regular bank loan, then you know that it is a slow-moving process. Applying to an online lender, on the other hand, guarantees a much, much faster process.

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. That means online loan processing will also require 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 like most things online, the use of technology of online business loans will speed up things significantly.

Flexible options

The business loans offered by regular banks are very traditional such as term loans, credit cards, and lines of credit. Online business loans, on the other hand, afford you some flexibility when it comes to choosing the loan product that will suit your need. You are not bounded to old loan offerings. There is a variety of online business loans modified for different purposes.

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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