Out with the Old: Why Online Lenders are Taking Over the Small Business Financing Industry

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Have you tried getting a business loan through your local bank? Were you approved? How long did it take? Those who have gone through the process of trying to secure financing for their small business from a bank can attest to the rigorous steps. From the mountain of paperwork to the months-long waiting period, SBA loans require excessive patience and effort on the part of the business owner. With approval rates hovering anywhere between 20-30% depending on the month, is it even worth going to the bank? If not, what are the alternatives? Welcome to the world of online lenders!

Online Lending?

Online lending, otherwise known as alternative financing, has taken small business finance by storm with simple, fast solutions that can be secured from the comfort of your couch. No longer are business owners forced to take time out of their busy schedule to go and present their case to a bank. Instead, they can go from applicant to approved with a few clicks of a button. Online lenders realized that small business financing needed an upgrade, and they are delivering!

Some of the perks of using online lenders for your financing needs include…

Speed: Get financed in as little as 24 hours
Convenience: Complete the required steps when and where you want
Simplicity: There’s less paperwork standing between you and funding
Accessibility: Online lenders combine dedicated account representatives and web-based services to give business owners 24/7 access

With all of these perks, how can the banks compete?

Banks continue to be the preferred choice of business owners because their loans offer the lowest interest rates. It is thanks to these low rates that banks are able to require near perfection for approval. However, even if your business is among the few to get bank approval, you could be looking at a number of months before those funds hit your account. For some business owners – if not most – time is of the essence when seeking financing. That three month waiting period may be three months too long. After all, a lower rate doesn’t do you any good if you can’t afford to keep your business operating until the loan has been processed. When you put it all together (speed, convenience, simplicity, and accessibility), it’s no wonder online lenders are taking over the small business financing industry.

Are you currently researching online lenders? Transfac Capital is a pioneer in the world of alternative financing, with our roots extending back to 1942. Our passion for helping small business owners avoid a cash crunch has led to an industry leading average in customer retention. Contact us today to discover why Transfac Capital has been a leader in alternative lending for 70+ years.

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