A number of small businesses require money to meet the financing and it considers a part of any small business life cycle. Plenty of online lenders are available to provide funds—based on a quick and easy application process.

The online lenders have revamped the business lending market via advanced technology—by improving the efficiency of a business. Countless industries have changed via technology in the past few years. Let’s rattle off a few: retail, shipping, travel, manufacturing, education, and the list goes on and on.

Benefits Offered by Online Lenders

Banks and alternative lenders are focusing to control their services through the internet in order to assist the business. In typical bank loans, you’re required to wait until loan get to proceed, whereas, online lenders offer you a variety of features such as:

  • Instant loan approval, mostly within a few minutes
  • A loan can be deposited in a business bank account within a few days
  • 24/7 services with an easy application process
  • No paperwork required
  • Lower interest rates

Compare the Turnaround Times of Online Business Loans

Online business loans are considered as quick processing and lending options in order to meet the financing. Turnaround time for the top online lenders is mentioned here:

PayPal Business Loans

  • Loans are ranging from $5,000 to $500,000 and the turnaround time is usually as fast as one day.
  • It requires annual business revenue of at least $42,000, a minimum of 9 months in the industry along personal credit score of 550+.

LendingClub Business Loans

  • Loan ranges from $5,000 to $300,000, as little as one week.
  • A business must have completed one year and $50,000+ annual sales.
  • Applicant has at least 20% ownership of the business, fair or better credit score, and no tax lines.

OnDeck Small Business Loans

  • Ranging from $5,000 to $500,000 within 24 hours.
  • A business must have completed more than one year in business, 600+ personal credit score, $100,000+ annual revenue.

Kabbage Small Business Line of Credit

  • A business receives a loan on very next day, range terms are starting from $500 to $250,000.
  • It requires $50,000+annual revenue or $4,200 monthly revenue of business over the last three months.
  • A business must have completed more than one year in business.

National Business Capital Loans

  • A company must have been in business for at least 6 months and have annual revenue of at least $180,000.
  • Loan ranges from $10,000 to $5,000,000, funded within few business days.

FORA Financial Business Loans

  • Offer business loans from $5,000 to $500,000, as little as 72 hours.
  • Must have been in business for more than 6 months, and $12,000+ monthly revenue.

Balboa Capital Small Business Loans

  • A business receives funds within one or two days, ranging from $2,500 to $250,000.
  • A business must have completed at least one year with $300,000 annual sales.

How do Online Business Loans Compare to Bank Loans?

In online business loans, it seems like all the lenders are offering the same thing, but that doesn’t make it true. As an owner of small business, if you’re looking for funds, traditional banks aren’t the only option. You need to compare the loan features and guidelines fixed by the lender while considering the loan. Online business loans have plenty of features to kick off conventional bank loans, such as:

  • Higher Approval Rate

Online lenders usually focus on present business state, rather than scrutinizing data points from a credit report. And, it’s a more suitable way of counting and improving the risk chances, obtaining more funds.

  • Faster Processing

Some online lenders provide quick loan approval by considering your business data and bank information. In online business loans, minimal paperwork is required to obtain the funds. You’re connected through business accounting data, and the lender can access your information whenever it needed.

  • Varied Products

Online lenders offer a number of funding options—including short-term business loans, long-term business loans, and line of credit. Business owners are able to obtain the loan according to the financing needs.

How do Online Lenders Approve Business Loan Quickly?

To get a loan from banks is a time-consuming process. A lot of paperwork is required and it takes a long time to proceed the loan application. Whereas, technology-concerned lenders approve the loan application in a few minutes, and provide funds within days. Advanced technology has a great impact, and it enables online lenders to do it faster.

In conventional bank loans, you’re allocated with a case manager, who is responsible to check your business finances, strengths, and requirements. Bank agrees to provide the loan, after checking the personal and business credit report. However, to get funds from banks might take a few days or weeks.

When you get funds from technology-oriented lenders, your business data is evaluated by an online system. All you need to do, fill an online application form to obtain the loan for your business.

 Why do new business owners have to pay more?

Many online lenders boost up the rate of loan approval, even for unsecured loans. As compared to bank revenue streams, small business loans are quite risky, and implementing the advanced technology to approve the funds is cost effective. Due to lack of financing needs, banks constricted the business lending requirements, and it is where the online lender comes in.

Lenders have several edges over traditional bank loans due to some reasons, such as:

  • Collateral

Online lenders offer a wide range of unsecured loans. So, you’re not required to put any kind of collateral online for getting funds.

  • Industry

Unlike online business loans, banks approach your industry to identify the risk estimate. However, online lenders tend to look more thoroughly at a business strength.

  • Credit Report

To get approved for a loan, banks usually consider your personal and bank credit history. Whereas the online lender only check your real-time business data, vendor payments, and social media occurrence to scale your business strength.

  • Expenses

Online business loans are usually cost friendly—based on advanced technology to proceed with the funds, and banks usually have a rigorous application approval process. To obtain funds from the bank is an expensive lending option.

In short, if you’re a small business owner and looking for funds, an online business loan is a compatible stop for you.

Should I go for Traditional Bank Loan or Online Business Loans?

The need for funds is based on business circumstances, and every loan is considered critically. While applying for loans, weigh these guidelines as a starting point:

  • Head over to the banks, if you’re running a well-established business.
  • If you’re looking for unsecured small business loans, or have an inflexible personal and bank credit history, go for online business loans.
  • If you need quick funding within days or a few hours, online business loans are the suitable lending option for you.

Moreover, technology has made every part of our lives easier, and enable you to compare different funding options all at once on the internet.

If you need more guidance regarding Business Loans, come over to our website and read blogs. For daily updates and financial solutions, follow us on Facebook (@Onlinecheck) and Twitter (@Onlinecheck). In case of any query feel free to call at (833) 827-4412 and our financial experts will guide you 24/7.

Small Business Financing News │ Merchant Advisors | blog
Role of Technology in Transforming Business Loans Approval
Role of Technology in Transforming Business Loans Approval
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MichaelGavin
Merchant Advisors
Merchant Advisors
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