Business Loans Online Approval Process
The financial crisis that began in 2008 and affected the world economy might technically be over, but it has continued to change the way the economy works. One of the biggest new trends has been the rise of entrepreneurs and small businesses.
With traditional companies not hiring, many people had two options: start their own business or go back to school. Enough people are taking the first choice to change the relationship between small businesses and the financial sector. For example, traditionally small businesses relied on their local banks for financing. Now, however, it is becoming more popular to go through business loans online approval to speed up the process and increase the likelihood of getting approved.
Small Business Capital Needs
A small business that is trying to grow faces a problem. It wants to spend money on things like marketing, space, product development, distribution, and other needs, but it does not have the money to pay for those things. It doesn’t keep a lot of cash on hand and, especially if it is a young company, it lacks the ability to just sell stock in order to raise money. However, if it cannot get the money, then it won’t be able to grow and it will stagnate. It is a catch-22 because the business needs funding to grow, but it can’t get funding without proving that it can grow.
The importance of loans and other capital sources in the growth of small businesses is core to their development. Every state in the US runs a Small Business Administration that specializes in overseeing the experience of small businesses, trying to protect their interests and providing them with low-interest loans backed by the government. These and other loans let the small business invest in itself and then pay back the loan out of its increased revenue.
Small businesses often have a hard time getting these loans. Because they are small, they tend to be more likely to experience financial setbacks or other obstacles that can interfere with them paying back the loan. Some banks are not willing to lend to small businesses at all. This is especially true in the current economy where there is a lot of risk in business and finance, so banks are trying to focus on safer and more conservative investments.
The younger a business is, the more trouble it will have. A company that has been around for 5 years has a history of revenue and a base of customers that it can use to prove to a potential lender that it can make income. A company that has been around for just 5 months might not even have started production of its main product yet. That means nobody has any true idea of whether it will succeed.
Even if the bank does decide to approve the loan application of a small business, it will often change them a higher interest rate. That can be just as bad as a denial because it means you as the business owner need to pay more for access to capital. The increased interest rate might make the entire project no longer worth it.
The fact that so many banks are skittish about lending to small businesses has led those businesses to consider alternatives. For example, one issue is the fact that applying for a business loan tends to be a fairly involved process. It takes a trip to a bank, several conversations with representatives of the bank, credit checks and other background checks, and a lag time while the bank reps check with their corporate bosses.
Instead, alternative capital providers are delivering more streamlined solutions. Chief among these is moving more of the process online. It may not be necessary to do much of this work in person because so much valuable information about you and your business can be shared with an online application. On top of that, processing the application and following up can all be done via automated software to ensure that there is less time spent waiting around for people.
Banks are not as good at spotting these kinds of efficiencies because they are large institutions with a lot of inertia. This has given rise to companies that specialize in providing capital to businesses, especially small businesses, and which take full advantage of new processes and technology to do so. They aren’t banks, so they don’t need to face the same challenges that banks face and they are free to focus only on their business customers. Traditional banks depend on consumers and other clients to provide their working capital, which is limiting. They also face strict regulations and oversight that slow down work and increase costs.
GoKapital is one such provider.
It operates in Florida and serves small and medium-sized businesses of all kinds. GoKapital has a number of specific loan programs that are designed to fit the needs of these businesses. That includes working capital loans, merchant cash advances, equipment and real estate loans, and loans for businesses owned by women and Latinos.
All of these needs are important to a growing small business, and yet all of them tend to be left unsatisfied by traditional banks and credit unions. Early growth makes a big difference to whether the company will succeed or fail, because it has to reach the point where it starts to earn a profit quickly. Without the capital from GoKapital and other providers, many Florida small businesses would be in trouble.
Small businesses need to start taking things into their own hands and looking outside the traditional banking sector if they want access to capital. Building a relationship with a lender is an important step for future use of a variety of different credit products that might be useful to a business. The better the lender gets to know the business, the easier it will be for them to approve future loans. The new capital providers just take a lot of the wasted time out of this process so they can get started on the important aspects right away.
Any Florida business that needs capital of any kind should consider GoKapital or one of its alternatives. A simple business loans online approval is all that stands between you and the liquid cash you need to carry out key projects and manage daily expenses.
Don’t let the risk aversion of banks in your area hold you back and prevent you from taking advantage of the opportunities you see. Try looking into business loan providers for your small business today.