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Reasons to Choose Online Business Loans

In case you are an entrepreneur who is looking for capital to jump-start your business, you may want to look beyond traditional banks for your funding needs. 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.

Borrowers from ten years ago would not find online business loans a viable alternative for their needs. Conventional banks were still the preferred source of funding by small business owners. 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.

Commercial banks tend to tighten access to credit for small businesses because of the following reasons. 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. Because of these reasons, only a small percentage of small businesses can qualify for bank loans nowadays.

This is where online business loans can be helpful. 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. In case your bank loan application for your startup business was declined , you may want to look at an online loan. Below are the distinguishing characteristics of an online business loan compared to a bank loan.

Instant 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. This also means that there is no paperwork required in your application. You do not waste time looking for and gathering documents as the lender won’t need them in processing your application. And like most things online, the use of technology of online business loans will speed up things significantly.

Flexible options

Regular banks tend to offer term loans, credit cards, lines of credit and other traditional business loans. On the other hand, online business lenders can adapt their loan products according to your needs. 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. 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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