The thrill of starting your own company can rapidly go down the drain if you consider the financial aspect. However, it is a rewarding process but also financially demanding.
A significant area of your excellent business plan is financing, which, if not adequately planned and prepared for, can get you back to where you started in a few months.
Financing is crucial to the success of your small business. Ordinarily, traditional lenders are a go-to for raising capital. But they have a range they consider acceptable and may require some collateral before attending to you. But what happens if that fails, or what other options are available to finance your business? Yes, you guessed right! Online Lenders.
Some available online Lenders give out loans, like the ITIN loans, amongst many others. This article will consider the differences between traditional and online lenders, the benefits of online loans, and some that you can apply for.
Let’s get right to it!
Differences Between Traditional and Online Lenders
Both online and traditional lenders offer the same services, except that one is more stringent in requirements than the other. To make better decisions, it’s ideal to understand the differences between them and operating.
The most distinct difference between traditional and online lenders has to be their qualifications or requirements. Traditional lenders hardly give loans to new businesses; preferably, your business must be two years old.
To qualify, you must also meet their minimum credit score, a FICO score of 700 and above. Some might even demand collateral before they give you the loans.
Conversely, online loans don’t require a credit score, and for those that do, the minimum is not as high as traditional lenders. They also give loans to businesses just starting.
You need a ton of paperwork to qualify for a loan from traditional lenders. This includes a detailed business plan with financial data, investment information, personal and business income tax returns, and legal documents.
Online lenders do not require such enormous paperwork. Some only require that you link your banking accounts while applying. Some online lenders, like ITIN loans, only require your ITIN number to qualify.
Funding Times is another main difference between traditional and online lenders. It can take weeks before banks can inform you of their decisions, let alone give you the loan. This is not good for small business owners, especially if they are just starting.
On the other hand, online lenders inform you of their decision immediately, or at most, a working day. And the funds can be in your account in just minutes of your application.
Now that we’ve seen differences, here are a few benefits of online lenders.
Benefits of Online Lenders
Ease Of Application
What comes to mind first is the ease of application. Online loans are friendly and easy to apply for. The application process is entirely online, which can be done right from the convenience of your home. They are approachable and readily accommodating.
Their interest rates are generally low compared to traditional loans.
Once your loan is approved, your funds will get to your local account in minutes. It comes in handy and right on time.
Flexible Loan Amount and Duration
Depending on your eligibility, you can get the loan amount you asked for and want and choose your preferred repayment duration.
So, let’s consider some attractive loan options to help your business get started.
Attractive Loan Options You Can Apply For
Lendio might be the best small business loan company. It’s easy and can be accessed in just about 15 minutes. The interesting thing about Lendio is that they partner with other lenders to provide you with attractive loan options.
Fundera by Nerdwallet
Fundera has similar loan options to Lendio and also offers microloans to businesses. They do all these with low-interest rates and flexible repayment plans.
This loan option works better for established businesses. Although they have a stricter requirement than Lendio and Fundera, they offer more affordable financing with longer repayment plans.
If your business needs immediate funding, BlueVine is your go-to online lender. BlueVine offers same-day funding with its line of credit and next-day financing through invoice factoring.
You need to submit details about your business, and your funds might be on their way to your account in a few minutes.
There are, of course, other attractive loan options you can opt for to keep your business running. Moreso, with your ITIN number, you can apply for some of these loans, such as ITIN loans.