With the rising integration of technology in the Indian financial services sector, each and every aspect of the financing industry has undergone an extreme transformation. Earlier when government banks had the monopoly over the consumer and business lending industry, long queues and distraught looking business owners were a common sight at the bank branches.
The situation changed with the entry of private players in the industry. Private Banks and Non-Banking Financial Corporations (NBFCs) challenged the hegemony of public sector banks and started giving them a tough competition. Customer-friendly approach and corporate style work culture gave them a definite edge over the archaic working style of public sector banks.
Then, after the latest technology boom, smartphones and the internet became the name of the game. People started looking for further convenience and comfort while seeking unsecured business loans from private financial institutions. But the private banks and standard NBFCs could not offer precisely what the small business owners wanted.
This is where online lending companies came into the picture like a fresh breeze with unique products. Their different products include unsecured business loans and capital finance loans, which are designed exclusively for small business owners in India. With their extremely convenient and comfortable style of operation, online lending companies have fast risen up the ranks. They have managed to become the preferred borrowing option for small business owners.
About Online Lending Companies
Online lending companies are specialized non-banking financial corporations, who have taken their entire process right from application to disbursal for a business loan online. They follow a paper-less and minimal documentation process wherein the borrower only needs to provide the PDFs of the KYC and financial documents for the processing of the business finance application.
The business owner can apply for any business loan of his choice, subject to availability with a particular online lender, through their website or mobile App. If your profile meets the lender’s requirements, the business loan application will be approved and disbursed within a few working days.
If the business has a gross annual turnover of more than Rs. 5 Lakhs, then the business owner can avail an instant unsecured loan of up to Rs. 5 Lakhs with a maximum repayment tenor of 24 months. He can use the loan amount for any business-related requirement, such as working capital needs, machinery purchase, upgradation of infrastructure, etc. These online lending companies also offer the benefit of opting to foreclose the business loan without incurring any additional charges after the payment of a few EMIs.
Online lending companies follow flexible business loan eligibility criteria, where they run an independent credit evaluation for ascertaining the creditworthiness, in addition to the CIBIL. This gives a better chance of being approved for an SME loan. They follow a transparent process and keep the applicant updated through SMS and Emails regarding the status of the business loan application.
Benefits of Availing Loans from Online Lenders
It is not without reason that online lending companies are becoming extremely popular with small business owners for meeting their urgent funding requirements. It is on account of the various advantages that online lending companies have over traditional financial institutions that give them the edge.
Here are the most significant benefits of availing unsecured business loans from online lending companies in India:
- Convenience: online lending companies offer the comfort and convenience of applying for an unsecured business loan from anywhere- home or office. The applicant need not visit any office or meet any officer; just a few clicks on his smartphone or laptop is all that he needs to process the application. Moreover, he will regularly receive updates regarding the status of the application through SMS or Emails. So, he would always be in the loop.
- Transparency: online lending companies follow complete transparency in their operations. Every bit of information is available on their website or mobile App. This helps in making an informed decision, which is beneficial for the financial condition of the business.
- Flexibility: online lending companies offer a wide variety of business loans for different business-related requirements, which are specially designed for small businesses. An entrepreneur can avail options like unsecured business loans, capital finance loans, term loans, working capital loans, and machinery loans.
- Extended Repayment Tenor: an applicant can avail a maximum repayment tenor of up to 24 months in which he has to pay off the amount through easy EMIs. There is no need to make any lump-sum payments. An extended number of EMIs reduce the amount to be paid as an EMI, making the loan more affordable.
- No Pre-payment Charges: online lenders offer the flexibility to repay the entire outstanding amount before the completion of the tenor, that too without incurring any penalty. This will help save money on interest costs.
With such extensive benefits on offer, it won’t be an iteration to say that online lenders are set to become the best option for business owners seeking funds for their urgent requirements.