Importance of Funding
Funds act as fuel for any new business which is trying to mark its existence in the market. Owning a business gives you the satisfaction of being your own master and gives you the power of decision making as well. However, it sounds good but there is one more side of this which is the stress and tensions related to gathering funds for the business. There is a fear of uncertainty as well as pressure to make the right decision as you have people dependent on you who are working under you.
Online Business Loans
Business Loans are one of the convenient options to fund your business but it might take more time or one might not get approved for it due to certain reasons which include missing some documents or lack of a proper business plan.
The online lending companies like NBFCs & DSAs have started processing and disbursing the business loan online. The entire loan processing is completed online which saves you from all the hassles and gives you the comfort of availing a loan while sitting in your home or office.
Online business loan has gained massive popularity among business owners in recent times. The strict eligibility criteria and collateral required against the business loan by banks is the reason behind this. Online lenders offer flexibility in all these aspects as compared to that of banks and this has made online business loan companies to be ahead of the banks.
Key Highlights of an Online Business loan
- Can help you set up your new business.
- Can be used to expand business.
- Make procuring a business loan in India easy and simple.
- Offers flexible business financing.
Benefits of Online Business Loan
Hassle-free Application Process
No paperwork involved, no need to fill lengthy application forms.
The application form is available online with minimal fields to be filled. Soft copies which require minimal documents needs need to be submitted online along with the form. It provides a convenience to the applicant to fill the loan application conveniently from a computer or a smartphone being anywhere.
Flexible Tenures
Online business loan offers flexible tenures for the repayment, this makes repayment easy. One can choose a business loan tenure for a minimum of one year to a maximum of 5 years. But this can also vary from lender to lender.
Flexibility
The online business loan offers flexibility in terms of using the borrowed amount. The borrowed amount can be used for any activity related to business.
However, many lenders offer business loan under fancy names such online lenders offer different types of business loans, such as capital loans, working capital loans, machinery loans, and term loans.
Top-up Loan Facility
If your requirement is not fulfilled with the borrowed money, you can get more money on the same loan, under the same process through the top-up loan facility for existing borrowers.
For example – you made a business plan, according to which you needed 7 lakh to expand your business in the nearby city. You applied for an online business loan and got it approved. But after one year you faced some loss and some urgent requirements came, where you need 2 lakhs more. In such a situation, you can avail a top-up business loan facility. This will provide you funds in no time, as you have already have the existing loan. The amount you are borrowing now will also be added to your previous account, and you need to repay it along with your previous borrowing.
Nominal Eligibility Criteria
Online Loans companies have some straightforward & minimal eligibility criteria. Generally, when you go with banks the eligibility criteria set by them are difficult to meet by small and medium scale enterprises. They have their eligibility assessment process which reduces their risk. Whereas the online lenders offer flexibility which doesn’t depend much on the CIBIL score or the borrower’s profile. Moreover to get approved for a business loan application from a bank you need a proper business plan. While when you apply for a business loan with an online lender you don’t need to show them your plan.
Competitive Interest Rate
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 fulfil 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.
