Why Getting a Business Loan is Easier than Ever
Ask any business owner who has gone to a bank to get business loans and you are likely to see that person’s stress level rise. While banks are still the primary source of small business loans, only a small percentage of businesses that apply for bank financing are actually approved. Furthermore, the documentation associated with a bank loan can be overwhelming. So what are the financing options for small business owners?
Online business loans have come a long way in the past ten years and now is making-up a larger percentage of the lending marketplace for small businesses. In addition, once seen as an alternative lending source, the online marketplace is also becoming a primary option for companies seeking additional capital.
In an interview with Biz2Credit’s Director of Sales, Tommy Blinder, he discusses the benefits to companies of using the online marketplace to obtain working capital for businesses of all sizes.
Who Should Use the Online Lending?
Blinder explains that Biz2Credit and other online marketplace lenders differ from traditional banks in that their requirements are much less stringent than a traditional bank and therefore greatly increase the likelihood of a business obtaining financing. He goes on to describe how the business revenue and the business plan play a much stronger role in the financing decisions, as opposed to a bank which uses a multitude of criteria (any of which can exclude an applicant from getting a loan).
In particular, he says that Biz2Credit looks at business loans from the standpoint of the revenue history much less than the owner’s personal credit score. Blinder encourages business owners with less than perfect credit to apply for financing and notes that there are many reasons a person’s credit score is lower and in many cases it has nothing to do with their business viability.
Many retail businesses such as restaurants, liquor stores and other retail-based companies have an especially difficult time obtaining business financing from banks. Tom says he “loves retail businesses” because he often can secure financing for these types of businesses when no other institutions will.
How to Apply for Online Business Financing?
Most financing applications can be performed completely online and by phone. Although, Blinder explains that his applicants are also welcome to make their application for financing in person. He explains that between the reduced paperwork and documentation requirements and the online apps used by Biz2Credit, the process is extremely efficient and takes very little time to complete.
Documents required include bank statements, which can be connected directly from your online banking account to the secure Biz2Credit application is generally the primary documentation that is required to process an application for financing.
In addition, applicant with be asked to input basic personal information on their secure, encrypted application, such as: tax ID’s, social security numbers for owners and other basic information about the company and the applicants.
How Much Can You Borrow?
Blinder explains that Biz2Credit will provide financing up to 100% of the business’ monthly revenue. In some cases he says it could be less, depending on the business credit profile, but it is usually up to 100% and in some cases may exceed 100% of revenue. In the latter case he says that some long-time customers will qualify for higher amounts.
Online Information Security
Biz2Credit offers several layers of online information/account security and encryption from a propriety layer as well as from third parties and your bank as well. He explains that when uploading banking information, nobody in the company can use the business-owner’s banking account details as a result of the encryption. However, he explains that less information is exchanged in the application process than when a business owner writes a check to a vendor.
A Business Financing Partnership
Blinder says that over 80% of Biz2Credit’s clients are repeat customers. He notes that once he gets the application processed, the team goes about seeking the best financing options for their clients.
Blinder says there are a few areas of specialty that they particularly excel at including: loans for women, SBA Loans, loans for doctors and small business loans.