Online banking has been established for years, but the new additive of online loans took a bit longer to catch on. Now that it has, the art of online lending has skyrocketed as a means to an end for people looking to temporarily close the gap between a variety of financial obligations – whether it’s starting up a business or paying off home repairs.
According to smallbiztrends.com, online loan platforms were first created by non-bank owners who acted as brokers, collecting a fee to match borrowers with lenders and offer them multiple loan options to compare.
Financial technology and advances within the internet itself has enabled this trend to continue, and as a result, there are now plenty of online marketplaces to choose from, like SkyCap Financial in Kingston, Ontario. Established in 2013, SkyCap Financial has become one of Canada’s premier personal lenders, offering loans to individuals across the country.
There are major benefits to applying for loans online, like the minimal amount of time it takes to open one as opposed to the traditional route of going in to a brick and mortar lender such as a bank.
Most online marketplaces offer a fast and easy loan application process. Providers like SkyCap Financial eliminate the waiting period by depositing funds directly into the borrower’s bank account, once the loan amount is approved, of course. These types of online marketplaces also offer flexibility and convenience to the client, often setting up an automatic payment program so the loan payments are withdrawn from their accounts regularly, with no worries about missing a payment.
Because of the ease and convenience of this process, there is a growing number of entrepreneurs turning to online lenders in order to secure the cash they need to grow their ventures.
Small business owners who are being turned down by banks find the rejection is largely in part to the amount they are requesting. If the loan solicitation isn’t a substantial amount, banks are more likely to deny applicants because it’s just not profitable for them.
In addition, online lenders often charge lower interest rates and smaller service fees than banks, typically since they don’t have the same overhead and regulatory costs that traditional institutions do.
It’s easy to get started. You’ll need to provide some personal information such as your social number and address. Depending on the lender, you may also need to provide information about your job and income, expenses, etc.
Connecting borrowers to the digital economy through the online lending marketplace has removed many of the obstacles it once took to access capital quickly.