For many years, public sector banks were the only option for small business owners looking for a source of external funding for their business requirements. But banks being banks, function in their own archaic manner. A virtually unending list of documents, formalities, visits, questions, queries, approvals, and rejections used to tire out even most enthusiastic businessmen.
They, in the end, gave up all the hopes of getting a business loan to fund their various requirements and select few whose applications for business loans were approved, had to comply with so many rules and regulations to be able to use the funds. Then there was a requirement to inform the banker regarding the intended use of money. And they could use it only after their approval.
Then came online lending companies and NBFCs who changed the scenario significantly and started offering customer friendly services as per the convenience of the customers. These private financial institutions considerably reduced the time for processing of an MSME loan application and soon became the preferred lenders for small business owners. Though these financial institutions significantly improved the working style of the financial services sector, still, business owners were looking for more convenience and comfort.
With the latest technology boom and online lending companies, the financial services sector has taken a giant leap. These companies took the concept of convenience and comfort for customers up a notch and started delivering their services through online platforms. Now, with the rising use of smartphones and the internet, these companies have started offering their services through their mobile Apps. Now, the business owners need not visit any bank branches or meet any officials, they just need to tap a few buttons on their smartphones, and their application for an MSME Loan will be submitted and processed accordingly.
About Online Lending Companies
Online lending companies, also known as online business loan companies, are special non-banking financial corporations who offer their business loan services through their websites and mobile Apps. They follow a paperless and minimal documentation based process wherein you only need to provide the PDFs of the KYC and financial documents. If your profile meets their business loan eligibility requirements, then it only takes them a few working days to process the application. The business loan amount is transferred directly to your bank account.
If your annual turnover is more than Rs. 10 Lakhs, then you can avail unsecured business loans of up to Rs. 7.5 Lakhs for any business-related requirements of yours, such as the purchase of machinery, working capital requirements, payment of expenses, etc. You can opt for a repayment tenor of up to 36 months to repay the business loan. These business loan companies follow a holistic approach while assessing your eligibility for a business loan, in addition to the CIBIL. Thereby significantly enhancing your eligibility for an unsecured business loan. These online lending companies follow a transparent style of working, wherein you receive regular updates over email and SMS regarding the status of your business loan application. This eliminates the need for you to visit any branch or call anybody to know the status of your business loan application; everything is at your fingertips.
Advantages of Online Lenders over Banks
With their innovative products and efficient working style, online lending companies have become the preferred option for small business owners as compared to traditional banks. This shift has been due to various advantages that a business owner can avail by taking an unsecured business loan from the online lending companies.
Following are the various benefits of online business loan companies:
- Online Working: Online lending companies conduct their operations through online platforms, such as website and Apps. You can apply for an unsecured business loan from the comfort of your home or office; there is no need to visit any branch or bank.
- Minimal Documentation: Online lending companies follow a minimal documentation process wherein you only need to provide necessary KYC and financial documents to process your application. With their online working, they take only a few working days to approve the application.
- Regular Updates: Online lending companies always keep you updated with the latest status of your business loan application over email and SMS. You need not visit or call anybody to know the status of your business loan application.
- Flexibility: Unsecured business loans from online lending companies can be used for any business-related requirement of yours. There is no need to inform the lender regarding the intended use of money.
- Transparency: Online lending companies have their terms and conditions along with all relevant details uploaded on their website or mobile App. You can browse through various different business loans offered by them and then select one which meets your requirements completely. There are no hidden clauses.
With the numerous advantages that online lending companies have over banks and other financial institutions, it is only a matter of time when they will become the biggest providers of instant business loans.