5 Benefits of Getting a Business Loan From a Direct Lender
While a business may know what it's getting with a traditional bank, direct lenders can offer a different kind of benefit for SMEs.
If you are a small business owner, you may know how difficult it is to get a business loan from banks and other financial institutions. The number of small business loans by traditional lenders has been on a decline since the 2008 financial crisis. This is not exciting news for small business owners who require financing to keep their small businesses moving.
However, this doesn’t necessarily mean you can’t acquire a business loan when you need one. You can always get a loan from a direct lender. You don’t have to only rely on traditional lenders; direct lenders are a great option for short-term loans. Here are five benefits of working with direct lenders.
1. Easier loan approval
Have you ever wondered why big banks and financial institutions are not interested in giving out loans to small businesses? It’s because the returns associated with small business loans are not worth the risk to them. Direct lenders don’t think this way, which makes it easier for small business owners to get financial assistance from direct lenders.
2. Flexible loan terms
Unlike strict bank loan terms, direct lenders offer flexible loan terms that are favourable to small business owners. They are more accommodating when it comes to their interest rates. If you have a good credit score, you have a good chance of securing favourable terms with a direct lender. If your credit score is not good, direct lenders can still find an option on how to work with you.
3. Quick cash release
Time is of the essence for small business owners looking to keep their businesses afloat. Traditional lenders do not realise this, and most of them take a while to approve loans and release the cash. This is not the case with direct lenders, most of whom operate their businesses online. This means they approve loans and release loan cash quickly.
4. No large down payments
Normally, banks and bigger financial institutions require a huge down payment before they agree on repayment terms. This is unfavourable to small businesses, most of which do not have the ability to make a big down payment. Generally, direct businesses don’t require big down payments. However, there will be times when down payments will be unavoidable, but be sure they will be reasonable for small business owners.
5. You can acquire working capital
Working capital is the money required to fund a business’s daily activities. Most banks and financial institutions are unlikely to give working capital loans to small businesses. Fortunately, you can get a working capital loan from a direct business lender.
Many people can get a loan as long as they have the ability to repay it. However, it is a struggle for many small business owners as most banks and other traditional lenders fail to approve their applications, take forever to approve and release loan cash, and when they do, they give unfavorable loan terms. Fortunately, direct lenders approve and release loan cash quickly, and their loan repayment terms are flexible.