Are you worried that your bank loan will be turned down? It is getting increasingly hard to get small business loans approved. Consequently, the alternative lending space has become extremely popular. These lenders utilize alternative and faster ways of approving loans which that assist business owners. Here are some of the most prominent reasons why you may consider the option of online lending.
Your annual revenue is less than $5 million
If you are a small business with annual revenue under the $5 million mark, it will be hard to get loans sanctioned from major banks unless your credit worthiness is outstanding. In some cases even when your credit is fine, you may need to offer collateral for large loan amounts. Large banks desire large returns. This is why most banks stay away from sanctioning loans to such firms as their return on equity won’t be great.
The hassles of paperwork
There are a lot of people who find paperwork to be daunting and challenging. Are you one of them? When you apply for a loan from a bank, the amount of paperwork to be handled can be massive and incomprehensible. On the other hand, choosing online lenders will eradicate the need to handle endless papers. Most of the online forms can be filled out in just a few minutes.
Quick and fast
As online lenders mostly use automated technology, they can easily calculate the credit score of different firms and hence the decision whether or not to approve a loan will be made pretty quickly. This is why online lending is increasing in popularity for those who need a quick response.
When you choose online lenders, you will find that they are likely to offer much more flexible terms as a lot of their clauses aren’t as rigid as big banks that have stricter policies.
So, you should make it a point to explore the different details pertaining to online lending and then decide if you want to avail it.