A whopping 45% of business owners are denied a business loan more than once. A good chunk of those has stated that they don’t even know why their application was ultimately unsuccessful.
However, three-quarters of businesses have stated that one thing they needed in order for their business to progress was access to more capital. Whether this be via crowdfunding, business loans, or online loans, the key to staying afloat is often getting that cash you need to get by.
That’s where online business loans come into play. Many business owners find that online business loans are much easier to procure, and they’re even easier to pay off.
In this article, we’ll go over a few of the reasons why getting a business loan online is easier than the traditional way.
Read on for more.
1. You Don’t Need to Show a Business Plan
Some old-fashioned lenders will want to see your business plan before they will sign off on your loan. They want to make sure that your business has a solid future, and that, as a business owner, you know where you’re going. A weak business plan could disqualify you for a loan altogether.
But with online loans, you don’t have to know exactly where you’re going to gain capital. Instead, you can get loans based on a variety of other factors, including how well you’re managing your business thus far.
2. Your Personal Credit Score Doesn’t Matter as Much
Some lenders, like Dealstruck, for example, will take your personal credit score into account, but it doesn’t need to be super high. In fact, Dealstruck offers loans to people with credit scores as low as 600. Some online lending companies will offer business loans to people with credit scores even lower than that.
What matters more to online lenders is that you’re making money and your business is doing well. Otherwise, how you’ve handled your money in the past personally isn’t as big of a factor.
3. Collateral Isn’t Always Involved
With traditional business loans, banks typically want some kind of collateral, or guarantee, that you can pay back your loans. This can be in the form of assets or other valuable items you own. If you can’t pay back your loans, they can legally claim the items you put up for collateral as their own.
With online loans, collateral isn’t typically involved. Instead, you often pay back as you go, with the online loan company taking money out from your invoices or the money you’re making. You don’t have to worry about risking it all for a little bit of extra cash.
4. You Don’t Need a Reason to Want a Loan
Banks often ask you why you want a loan. They can approve or disapprove based on this alone. But with online business loans, simply wanting a loan is enough for the companies to hand over their cash to you (assuming you meet their criteria).
Using Online Business Loans
Thinking of applying for online business loans? If so, consider Dealstruck. Click here to see if you qualify today. There are no repayments (your clients do it for you), and, depending on the loan you choose, your line of credit is ever-evolving.