Businesses are today operating in a very tough environment. There is the recent global economic crisis that precipitated dwindling of major stock market index leading into the Eurozone debt crisis that has affected production and consumption of goods and services in major financial capitals. As a result, enterprises have been forced to downsize their workforce, corporations have gone bankrupt. The few remaining entities are finding it extremely difficult to meet sales target or even expand their product portfolio.
With the ongoing economic turmoil, mainstream financial lenders are finding it difficult to advance cash to small businesses. It is in light of this fact that online business lenders have emerged to bridge the financing gap evident between mainstream financial institutions and small businesses. These online lenders also understand that different operations require unique products and the online financiers have gone steps further and structured products such as business loans for women and credit card processing loans. With a finance scheme at hand, small and medium enterprises can witness immediate growth provided that the acquired capital is prudently utilized. Other benefits associated with applying for an unsecured business loan include:
Small business owners acquire unsecured business loans due to various reasons but mostly depending on their financial needs coupled with enterprises’ ability to repay. Organizations opt to select business cash advances to bridge their operation requirements on a short to long term basis. Companies may also acquire an easy business loan to augment its operational expenses including meeting budget deficits, paying employees, and advertisement or rent expenses. There is also the option of an overdraft whereby an organization overdraws its current account.
Besides, rapidly growing businesses can utilize the new capital injection to move up the value chain. Since online lenders are never strict on how the cash injection is utilized, the prerogative on how to spend the funds are dictated as per the needs of the business.
Convenient Repayment Options
Online loans come with convenient repayment options ranging from weekly, biweekly, monthly, or quarterly installments. It is advisable to always work out a convenient repayment schedule that does not affect the operations of the entity. Business owners also have the freedom to either lower or increase the repayment amounts depending on the performance of the business.
Affordable Interest Costs
Online business loans have some of the most affordable interest rates. The interest amount is normally determined using several criteria including borrower’s credentials, market dynamics, the financial situation of the business, the tenure of the loan and collateral if available. Besides, other charges such as commissions and processing fees are nominal and in certain cases, they are waived to provide borrowers with an enhanced level of flexibility in meeting borrowing cost.
In most cases, online financing does not require a security either in form of a title deed or a vehicle log book. What is important during the loan application process that determines the overall credit score is the previous cash flow statement and projected financial inflows. Such a scenario makes it easy for small business owners to access cash injection to sustain their operations. Courtesy of online portals, entrepreneurs have an easier time tracking their loans because all the details are stored in a centralized database accessible online. Some of the information that can be acquired through the online portal includes repayment history, payment schedule, prevailing interest rates and other charges such as penalties.
Steps When Applying For An Online Business Loan
The procedures for applying for a business credit card loan are very straightforward. However, there is a compulsory application criterion checklist including:
• The entity must be fully registered in the United States
• The business must have an operating bank account
• Previous cash statement from the business operations must be readily available
Immediately the above documents have been ascertained to be available and properly arranged. The borrower can proceed at the online portal and enter in key details such as the name of the business, amount to be borrowed, loan tenure, purpose, guarantors if any, and contact preference. The information is then forwarded to the lender who ascertains the validity of the documents submitted before computing the credit score of the applicant. After the credit score is determined, the online lender decides whether to issue or decline the loan. In cases where the lender decides to issue the loan, the small business owner can use the opportunity to negotiate for lower interest rates and longer repayment period.
Such negotiations have been found to give the business some breathing space when making the installments since the enterprise has borrowed funds attracting charges while at the same time they are repaying very little. During this period, it is also recommended to renegotiate for a repayment holiday period. This is to enable the business remit loan installments when the funds have directly been injected into the business operations and are starting to give back returns.
After interest rates negotiations, the loans are then disbursed into the business account. From there, the business owner can now proceed and make the capital equipment purchase or even utilize the money in different business operations. They can include coming up with a new product line or enhancing operational efficiency by acquiring office equipment such as photocopiers. They could also include switching to green energy solutions such as solar power or energy efficient light bulbs.
Despite the many benefits associated with an online business loan, it is important for one to be conversant with some of the jargon included in the fine print within the loan application documentation. It is crucial that you fully understand the terms and conditions associated with the loan, and in case there are unclear terms or vague expressions, it is advisable to consult with the lender prior to fully committing the business into any form of external financing. Some of the critical items worth paying attention to include penalties associated with missing deadlines, frequency and flexibility or loan repayments, and aftermath consequences for defaulting on the loan agreement.
Our company is one of the leading online business lenders. We have experience handling business financing ranging for both small and medium enterprises, and it is recommended that you contact us through 1-866-257-2973 so that we can evaluate your businesses short term to long terms financial needs.