The benefits of direct lenders
If you have been running a small business for a while, you probably know how hard it can be to secure loans from banks and other financial entities. Since the 2008 financial crisis, the number of small business loans provided by conventional lenders has been on a steep decline. This is certainly not good news for small businesses that often require financing to keep their operations going.
However, this does not mean you cannot get funding for your business when you need it. You can always secure a loan from a direct lender. Traditional lenders are not the only funding parties in the game and you do not have to rely on them for that short-term loan. In this read, we are going to see some of the ways you can benefit by seeking direct lending.
1. Flexible loan terms
Direct lenders, unlike conventional lenders, have flexible loan terms that are feasible to most small businesses. When it comes to interest rates, they are more accommodating. As long as you have a good credit score, you can be certain of favorable terms with the direct lenders. However, even with a poor credit score, direct lenders will still be willing to work out an option that should work for your situation.
2. Easier loan approval
Ever wondered why bigger financial institutions like banks aren’t interested in providing loans to small businesses? Well, it all comes down to the returns. More often than not, the returns that come from small business loans do not outweigh the risks involved. However, this is not the case with direct lenders. This makes it easy for small businesses to get the short-term loans they need to stay afloat.
3. Fast money release
When it comes to running a small business, time is always a major factor. Unfortunately, conventional lenders don’t realize this and tend to take longer to approve and release the money needed to keep business operations going. Fortunately, this is far from the case with direct lenders. In fact, most of them operate online, meaning the loan approval and money release is fast.
4. No hefty down payments
More often than not, banks and traditional financial institutions need large down payments before they can approve repayment terms. This is certainly unfavorable for small businesses, as most of them don’t have the ability to make large down payments. However, direct lenders do not need large down payments. Keep in mind, however, there will be situations where down payments are unavoidable, but they tend to be reasonable compared to conventional lenders.
5. You can get working capital
In order to fund your business’s daily activities, you need working capital. Unfortunately, it’s hard for financial institutions and banks to provide working capital loans to small businesses. Well, not to fret as you can get this money by working with a direct lender.
As long as you have the ability to repay a loan, you can secure one. Unfortunately, it’s a struggle for most small businesses, as traditional lenders and banks rarely approve their applications, take long to approve and release the money and have unfavorable terms when they do. With direct lenders, however, you don’t have to experience such challenges.
