Typical sources of business financing have left a void for many new and startup companies. A new crop of fintech-based online lenders have move into to fill that gap. These new lenders provide the technology that offers many small business owners the convenience, application process, and most of all, the funding that they need. You might wonder if you can rely upon online lenders to help you with funding in the future.
Why Online Lending Platforms Are the Future of Lending
People who watch the lending industry don’t think these tech-based, internet loan companies are just a passing fad. In fact, they are likely to pave the way to the future of business lending for several reasons. In any case, online lending platforms are here to stay.
Online Lenders Cater to Small Business Needs With Convenient Services
If you’ve ever applied for a bank loan, you probably remember having to gather a considerable amount of documentation to prove that you were the sort of borrower that the lender wanted to do business with. In addition to everything else you need to do, you may have felt like your lender wanted you to jump through quite a few hoops before they could tell you if they would lend money or what interest rate they would charge. In fact, one reason these new lenders have appealed to so many business owners is because of the ease of online lending.
When you do business with an internet lending platform, you can check fees, apply, get your approval, and accept your funds entirely online. Because much of this process has been automated with sophisticated computer technology, your part of the process is fairly intuitive and easy. You also may not want to travel to meet with a loan officer, wait for an appointment, and suffer from many other inconveniences just to take out a loan. With an online lender, you can do everything online.
Online Lenders Work Quickly
Some traditional lenders seem to act like you are inconveniencing them when you ask to pay them to borrow money. Worst of all, they make you wait for answers. It’s not that traditional finance companies are that busy; however, their processes consume a lot of time. As a small business owner, you probably need to manage your time as much as you need to manage your cash.
After you submit your online loan application, these internet platforms can offer you quick approvals. Some are instant and many are within a day or two. Once you have an approval, you can request funding that will show up in your business account by the next business day. Enjoy a simplified loan process when you work with an internet lending platform.
Online Lenders Can Qualify Businesses That Many Traditional Lenders Can’t Quality
Small business owners may find it tough to qualify with traditional loan companies because they haven’t had a chance to establish business credit in their company’s name. There are a number of reasons why thriving businesses don’t look like good credit risks on paper, even though they actually do very well. Most commonly, the small business never used corporate credit before, so they have no credit history.
This obstacle won’t be a problem with an online lender who uses other means to qualify borrowers. For instance, they can simply pull records of business activity from payment processors, online sales sites, or even company checking accounts. With an internet lending platform, a borrower just has to demonstrate that they are active; however, they don’t need to produce business credit scores.
Internet Lending Platforms Break New Ground
You might have actually noticed some improvements with the way that your bank or other traditional finance companies do business. You can actually credit this progress to the example set by online lending companies. These new tech startups explored and engineered a lot of the technology first, and then some established financial companies realized that they needed to get up to speed or risk losing all of their customers.
If you want proof that online lenders represent the future of the lending industry, you really don’t have to look any further than that. When some traditional lenders start to copy new online lenders, you can bet that the future of lending is mostly online.