Using Online Lending

A restaurant needs a new patio. An auto garage wants to open another service bay.

- John Pereira

A hairdressing salon plans to enlarge its floor space. If you can’t bootstrap your business, there is a wide variety of both traditional and innovative funding sources you can draw from to help you get started. For many business owners, financing is one of the most intimidating and challenging parts of the process. Some entrepreneurs may not have the cash they need on hand when they want to launch or expand their businesses.

What’s online lending?

With the continued evolution and expansion of ecommerce and the web, traditional lenders are turning to the Internet for more of the loan origination, underwriting and servicing process. Increasingly, some banks and finance companies are becoming purely online lenders, originating, processing and servicing all of their loans online.

Fully online lenders don’t use the internet just for emails and advertising. They do nearly everything online – to the point that some online lending companies have no “brick and mortar” stores or locations to receive customers.

Growth of online lending

E-commerce and online lending has become common today, but the web is only about two decades old as we know it. In its early days, financial institutions used the web primarily for advertising and marketing. That is still how many lenders treat the web today, as a way to generate leads and attract prospective borrowers. But as consumers have become more comfortable with the web, especially in making increasingly larger purchase via the internet, more lenders have begun offering potential online borrowers exactly what they want: an online loan.