In today’s internet-savvy world, applying for a small business loan has transitioned from a complicated in-person process to an easy online application. Not all online lenders are equal though. Here are eight questions to ask when considering applying for a loan over the internet.
- Does the online lender have a secure website?
A lender that delivers small business loans over the internet should use an encryption system to safely receive your personal financial data. If safety is a concern of yours, look to see if the company uses a Secure Sockets Layer protocol (SSL). A simple way to check for this is to visit the site, look at the url in your browser, and make sure it starts with “https”. This simple addition to the url ensures that the information entered into the online business loan application form transfers safely from your computer to the lender.
- Who is the lender?
Who you obtain financing from makes a difference. You want to deal with a credible lender with high standards of service and an understanding of your needs. To learn what customers say about a lender, read their online reviews. Also, if you are one of the many business owners who prefer to deal with a Canadian lender, research the background of the lender and its leadership.
- What is the application and approval process like?
An online business loan application process should be more convenient than applying in-person. Before filling out your business loan application online, make sure you find a lender that matches your expectations regarding convenience. Remember to ask how long your application will take to be approved and if you will have to visit a physical location at any time. The most established and trusted online lenders offer an online application, approval within 24 hours, and do not require a visit to a branch. If you are considering Lendified, take note that our loan application is 100% online, takes less than 10 minutes to complete, and provides same-day approval.
- How do I repay my loan?
The method and frequency and payments vary according to the lender. As you apply for a small business loan online, make sure to inquire about your lender’s specific payment plans. Additionally, ask about the method of repayment – Will the payment be automatically debited from your company bank account? Will you be required to use a credit card to make payments? Can you prepay the loan at any time?
- What is the minimum and maximum term that I can borrow for?
This is a basic question to ask when applying for a loan, regardless if it is offline or online. Typically, online small business loan terms range from a few months to a few years.
- How much can I borrow?
Make sure you find an online lender that can lend the amount you are seeking. If you require more capital than what is advertised, contact the lender to see if you can obtain a higher loan or even multiple loans.
- What are the rates?
Be wary of online lenders who do not describe any of the costs associated with their loans. Often these companies have extraordinarily high rates and know you would never take the time to apply if you knew the details beforehand.
- What can I use my loan for?
Small businesses have unique objectives and challenges that a loan can help with, but not all lenders allow you to use the capital for the purpose you want. Check with the lender to see if they have exclusions. If you’re borrowing from Lendified, note that your loan can be used for everything from buying equipment or technology, to using your capital for marketing, expansion, or purchasing inventory.