According to a recent report, the share of retail lending in total credit has crossed 50%, and is expected to go up further for a few private and public banks. Also, in the financial year 2019, credit growth in retail has risen to 18.52%, against 13.55% in the previous financial year. Business loans are supposed to be the most convenient option to start a venture that could sustain for long. This could be the case where the business plan takes longer due to insufficient documents or misses a solid business plan.
All the online lending companies including banks and NBFCs have started to approve and disburse online personal loans. The entire loan application process is online and saves the effort to physically walk down to centers and fill in complicated forms. You can conveniently apply for a loan at the comfort of your house.
The merits of online business loans have gotten them on the top of the lending modes today. In addition, the stringent eligibility and security norms have strayed the customers from applying with banks. This is also one of the reasons how online lenders are faring so well in the market. The peer-to-peer lending marketplace for quick money exchanges, connects borrowers and lenders, thereby cutting out the traditional banking protocols.
Key Highlights of an Online Business loan
- Supports a new business venture
- Helps to expand a business, vertically and horizontally
- Simplifies the market lending exchanges
- Offers easy business financing option
Benefits of Online Business Lenders:-
Hassle-free Application Process
If you’re on a lending platform, there’s no need for paperwork, lengthy application forms. The application form contains selective important fields. All online copies need to be updated. This is the level of convenience it provides to the prospective customers.
Flexible Tenure
Online business loan gives you the flexible repayment tenure for easy EMIs. The loan tenure lies between a minimum 1 year and maximum 5 years. Though, this can vary from one lender to another.
Flexibility
Online business loans offer flexibility related to the borrowed sum. The same can be used for business related activity.
Top-up Facility
If your need is not met up with the sanctioned amount, then you can get an approval for a top up loan. Basically, this is an additional loan for the existing borrower. This is the fastest way to get funds in just no time, on an ongoing proposition. The repayments will be proportionately adjusted according to the previous loan.
Easy Eligibility Criteria
Online lending platforms have simple and accessible interface. This also allows easy eligibility clauses. The eligibility criteria by banks are usually tricky and looks wasteful for small and medium sized companies. Popular banks & financial institutions have their focus centered on the level of risk assumed whereas online lenders keep it easy. This enables valid offering for a larger sect of individuals. Moreover, to get approved for a business loan application from a bank you need a proper business plan. A business plan is not a mandate for online lenders.
Competitive Interest Rates
Online business loans are cost-effective as they offer the loan at affordable interest rates. When you compare the interest rate at which online lenders lend money, you will find it is way cheaper than the traditional lenders.
Transparency in Loan Processing
When you apply for an online business loan, you get one application number. Using the application number you can track the processing of your loan application anytime. This makes the processing process full transparent for the users.
Collateral Free
Most of the online business loans are collateral-free in nature. This means unlike conventional business loans by banks you don’t need to pledge any collateral or guarantor against your borrowing.
Online business loans can be taken to start a new business, to maintain or expand an existing business, or to fulfill any business need. There are numerous benefits associated with an online business loan which can help the entrepreneurs to manage their venture and to prove their potential.