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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. You can now apply for short term loans, installment loans, or any loan over the Internet which is known as online loan.

Ten years ago, the rarity of online business loans did not make it a viable alternative for borrowers. 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.

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. 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.

Thankfully, there are online business loans to fill the slack. There are online lenders in the lending marketplace to fill the void left by commercial banks that won’t open up credit for small enterprises. An online loan may be worth your consideration if your application for a bank loan for your small business was rejected. Below are the distinguishing characteristics of an online business loan compared to a bank loan.

Quick cash

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.

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. You do not waste time looking for and gathering documents as the lender won’t need them in processing your application. And because it is online, expect the processing time of your small business loan application to speed up considerably.

Flexible options

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. 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. 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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