If you're a small business owner, it might feel like it's becoming more difficult than ever to get a loan from a lender. This isn't just your imagination playing tricks on you. The total number of small business loans given out by traditional lenders has decreased by more than 20 percent over the last decade.
While that might not sound like great news, it doesn't mean you can't get a loan if and when you need one. You can always work with a direct lender. This will increase your chances of getting approved.
If you're in the market for a loan, here are 10 benefits you will enjoy when working closely with a direct business lender.
1. You Have a Better Chance of Getting Your Loan Approved
There are many traditional lenders, such as large banks, which aren't interested in working with small businesses for one simple reason. The reward associated with giving out a small business loan isn't usually worth the risk to them.
This is why traditional lenders turn small businesses down. They simply don't see the point in trying to help out a client that won't make them a lot of money. A direct business lender won't think this way. They understand that small businesses often need loans from time to time to be successful. They are more willing to work with them to see that their needs are met.
2. Get Better Terms on Your Loan
In the event that you are able to secure a small business loan through a traditional lender, you probably won't get the best terms on it. Traditional lenders will often saddle small businesses with high-interest rates and fees.
They are only interested in protecting their own interests when extending a loan to you. Therefore, they aren't going to give you a great rate in most cases. They will also try to tilt the terms in their favor to ensure they make a profit from your loan, one way or another.
You will often find that a direct lender will be more accommodating when it comes to giving you a fair interest rate.
The rate will be dependent upon everything from your credit score to your business history. But you have a better chance of securing favorable terms with a direct business lender.
3. Obtain a Loan Customized to Meet Your Needs
A direct lender is usually more motivated to work with a small business owner than a traditional lender is.
Whereas a bank might only spend a short amount of time trying to get a small business owner approved for a loan, a direct business lender will put forth more effort.
These types of lenders don't have to worry about working with a middleman or going through any sort of third party. Therefore, they can take the time to put together more creative loan terms that fit the needs of small businesses.
If you don't qualify for a loan through a direct lender at first, they will do everything in their power to try and customize a loan that you'll be able to manage. It's a good feeling knowing that a direct business lender is on your side and working for you.
4. You Can Avoid a Large Down Payment
Most direct lenders understand that small businesses don't have the ability to plop down a huge down payment for a loan. For this reason, they don't usually require them to do it.
There will be times when a down payment is unavoidable. But in general, lenders will try and change the terms of a loan around to avoid down payments that are unreasonable for small business owners to make.
This is a benefit you wouldn't get to enjoy with a traditional lender. Banks and other big financial institutions usually want to see a big down payment before they're ready to start discussing the repayment terms for a loan.
5. You Can Get Your Hands on Working Capital
A working capital loan is one that you can take out to finance your daily business activities. Many banks would be hesitant to give you these funds.
A direct business lender, on the other hand, knows that a loan like this can make or break a business.
If you've been struggling to run your business successfully due to a lack of available cash, you can change that today. Simply apply for a working capital loan. It will give you access to the money you need to keep your business up and running.
6. You Can Often Get Approved for a Loan with Fair Credit
There are many traditional lenders that wouldn't even think about handing out a small business loan to a company or individual with less-than-perfect credit. It just wouldn't happen since banks already consider most small business loans to be too risky.
Many direct lenders will also steer clear of giving out loans to small businesses with bad credit. But they are usually a bit more understanding and will do business with those who have fair credit.
Great credit is always best, but depending upon the terms of your loan, you may be able to work out a deal with a direct business lender.
Direct business lenders know the challenges many small business owners face. Therefore, they're willing to work closely with these owners to try and get them the loan they need, even if their credit isn't necessarily as strong as it could or should be.
7. Skip a Lot of the Usual Paperwork
One of the worst parts about getting a loan from a traditional lender is the paperwork associated with it. There is just so much paperwork for you to fill out and sign throughout the process.
There is going to be some paperwork associated with any loan you take out. But a direct business lender will usually try and limit it, especially since you're taking out a loan directly from their company.
Part of the reason why there's always so much bureaucracy with traditional lenders is that there are third parties and middlemen to consider. You end up having to sign forms for everyone involved in the loan.
With a loan from a direct business lender, there are no middlemen to consider. That should be less paperwork for you in the long run.
8. Receive Your Loan Quickly
As a small business owner, you don't have all the time in the world to sit around and wait for your loan to arrive. Often times, you might need the money right away to keep your business afloat or to buy a piece of equipment you need to make a product or provide a service.
Traditional lenders will often keep you waiting for weeks on end. But most direct lenders are able to work a lot quicker than that. They can send you money within a few days - if not even sooner.
Direct business lenders don't have to wait for paperwork from third parties. This speeds the entire process up and makes it easy for a loan to be approved and delivered.
If you're in a hurry to get access to your funds, a direct business lender is your best bet.
9. Work One-on-One with a Loan Officer
While some smaller banks will be able to give you the one-on-one attention you deserve, most banks don't take the time to form any sort of personal relationship with you. Your loan request is simply a business transaction to them - and they treat it as such.
With a direct lender, you will be partnered up with a loan officer who will work with you to customize your loan terms. Plus, he will provide you with the guidance you need.
Your loan specialist will be able to help if you:
Have a question about how much money you might qualify to borrow
Need the repayment terms for a loan explained to you
Aren't sure how to apply for a small business loan in the first place
Don't understand the language used in the agreement you need to sign
Want to find out about other services offered through the lender
Applying for a loan through any lender can be stressful. Your direct business lender will understand that and make sure you get the best customer service possible.
10. You Can Access Other Services through a Direct Lender
Most direct business lenders offer more than just small business loans and other types of loans.
Their teams have experience in working with those in many different industries. They can set you up with services that might not be available through other lenders.
Take the time to speak with your loan officer about how a specific direct lender can help you and your business.
Apply for a Loan with a Direct Lender Today
Are you seriously considering taking out a small business loan through a direct lender today? You should find out how to improve your chances of obtaining a small business loan before applying, and then get to work.
Contact us today to find out how a loan through a direct business lender could help you and your business!