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Reasons to Choose 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. 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. The number one reason is that they consider lending to small business a high-risk investment. It does not help that the small business lending process is just as exhaustive as that of bigger business but with a lower 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. What commercial banks won’t serve, online lenders are there to extend credit to 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.

Fast cash

Applying for a regular bank loan has not been characterized as a speedy 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. 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.

Accommodating 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. Your choices are not restricted to the customary loan offerings. Depending on your purpose, there is an online business loan that corresponds to your needs.

There is also a range of loan sizes online lenders offer depending on the amount 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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