drive the economic growth of our nation, employing about half of private sector workers and generating more than $6 trillion in annual revenue.
Starting your own enterprise requires dedication and lots of hard work to get it off the ground, not to mention there are plenty of obstacles including access to capital. Fortunately, small businesses have found a new tool & ally: online lending.
Helping small businesses grow, purchase equipment, hire employees, and strengthen our economy, these loans help fuel the economy. Online small business lenders, often working with traditional lenders, are helping supply credit to millions of small businesses across the country.
With small businesses seeing the value of online small business lending, following are four things you need to know:
Quick Approval & Innovative Underwriting
Small businesses need to be ready to act fast to both take advantage of opportunities and react to any obstacles that come their way. With loan proceeds becoming available to a borrower’s account in as little as a few hours, small businesses are able to be nimble. In this sense, time is literally money. The use of comprehensive and innovative underwriting, this allows online lenders to mold to the individuality of each small business, with data reaching from traditional expenses like employee growth to new-age necessities like the use of business’ social media. Online lenders know the range of small businesses, and the underwriting gives the lender a fine-tuned assessment.
Short Pay-Back Time
With the speed of delivering the money comes the speed in which the small business can repay the loan: with short payback durations, small businesses are able to structure their repayments around any influx of revenue, allowing them to match revenue and expenses. For example, a flower shop looking to stock up on roses before a busy Mother’s Day weekend: they know they’ll sell the flowers, but don’t have the cash to buy them. An online loan allows them to both receive and repay the loan quickly. Another case of the small business loan borrower is a cupcake store than relies on online sales to deliver the product: not only does demand for cupcakes change day-to-day, but the need for staff fluctuates as well. With flexible online lending, the store owner is prepared for whatever their day looks like.
Whether you plan for something months in advance or wake up at 3am to realize you need funds this week, online small business loans are fast and can be made at any time of day from the shop or the comfort of your own home. Thanks to pre-existing relationships with small business, many lenders already have the necessary financial information to your specific business and help you apply in the easiest way. Add on the short time, low cost and low complexity, and applying for an online small business loan may be the easiest thing you do all day.
Contrary to the popular belief that online small business lenders are free from regulations, there are a significant number of consumer protection laws in place, including the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Bank Secrecy Act, as well as state regulations and examination, and many money transmitter laws and regulations – just to name a few. With a convenient and readily-available resource like online small business lending, access to much-needed credit has expanded for small businesses, and technology-based efficiencies have been introduced to the small business market. With so many small businesses in the US, we should look at online small business lending as an opportunity for all of us.