Offline vs Online Business Loan – All You Need to Know

Business Loan

Over the past decade, taking loans has become more accessible and convenient. This is due to the next-level technological advancements in the financial sector. It’s a sector that has transformed and seen a 180-degree shift in how it offers services to its customers. A new industry called FinTech has emerged within this sector that leverages technology to provide traditional financial services. The personal lending space is another aspect that has seen a complete change – they have made a whole range of financial services more accessible to customers at any time. 

When it comes to Business Loans, you can get them online from the comfort of your home at the click of a button. Despite the advantages, people still opt for the old-school ‘offline’ way of availing Business Loans. 

Let us understand how offline and online Business Loans compare in several critical aspects. 

Processing time

Online Business Loans have short processing times. It can take a few minutes in terms of the applications if all your documentation is ready with you. Once you have filled in the application form with all your relevant information, the lender will instantly tell you if you are eligible for their Business Loan and if yes, they will let you know the credit limit. Since you have met their eligibility criteria and know the maximum amount you can borrow, you enter the desired amount and upload your documentation. The approvals may take a couple of hours, and you will get the required Business Loan within a few days. This online loan application and approval processing are even faster regarding Personal Loans. 

The processing period for an offline Business Loan can go up to almost two weeks. This is because traditional lenders require time to assess your credit profile and authenticate your submitted documents. The other issue is their working hours, 9 a.m. to 5 p.m., and the fact that they are closed on weekends and national holidays, things that don’t even cross your mind when you apply for an online Business Loan

So, an online Business Loan is the preferred option for emergencies in a business that requires immediate funding, owing to the processing time. 

Assessing your eligibility 

Whether an online Business Loan or an offline one, the eligibility criteria remain the same.  However, online lenders’ advantage is the Business Loan eligibility calculator. You can evaluate if you qualify for a loan by entering some information and knowing the tentative loan amount you will be eligible for.

On the other hand, an offline Business Loan will require you to physically visit the lender’s office and have an in-depth discussion mentioning your credentials and additional information so their representative can determine the quantum you are eligible for. 

Negotiation of terms and conditions

When you go for the offline route of applying for a Business Loan, it becomes easier to negotiate the loan terms with your lender, especially if you are a first-time borrower. Since the interaction is more personal and “face-to-face”, you can present the nuances of your business funding needs to your liking. You may successfully get more flexible repayment terms, get some charges/ fees reduced or close on some favourable T&C. 

In an online Business Loan, everything is pre-set, you need to enter numbers, and the outcomes will change as per those. There is less scope for negotiation when applying online. Undoubtedly, digital lenders offer Business Loans at incredibly competitive rates owing to the number of online lenders that have sprouted. They offer tools that make the comparison easier.

Discounts and offers

Many online lenders have the capacity to offer special discounts on Business Loans as a part of more extensive marketing campaigns. These special offers can vary from low-interest rates and zero EMI to waiving off processing fees and providing some discounts or exclusive offers on other services from them. An offline loan may not appear as attractive regarding freebies and offers.

Ease and Convenience

The fact that you can get an online Business Loan from the comfort of your home, at any point in the day and from a device of your preference declares the online Business Loan a clear winner regarding customer-friendliness. The time taken for approval and disbursal, ease of uploading documents and free financial tools, like the eligibility and EMI calculator further make this process hassle-free and more streamlined. Last, the approval time is just a few minutes when applying for a Business Loan online. Offline loans are not as convenient for the borrower because many things need to be kept in mind. One needs to factor in operational hours, weekly and festive offs and the need to physically visit the lender’s office. If you forget to carry even one document, you will be required to come another day and leave the process for a whole new day. 

Documentation required

While the documentation required for a Business Loan will be the same whether you apply online or offline. An online Business Loan will require you to upload scanned copies of the KYC forms and other business-related paperwork online itself and it can be done in 15-20 minutes. An offline Business Loan is a bit more intensive regarding paperwork. You will have to fill out several forms manually and carry hard copies of all your business documents, which can be time-consuming and frustrating. 

Taking an online Business Loan has become a matter of minutes. Something that once required us to physically visit the financial institution a couple of times on working days with a bunch of documents has now been brought to our palms at any time of the day from any place in the world. The application process is more streamlined and straightforward, and loan approvals and disbursals have sped up. New-age or even traditional lenders who have jumped on the digitisation bandwagon have eliminated bottlenecks associated with the conventional form of lending. Say goodbye to excessive paperwork, multiple weeks of waits and slow approvals and disbursals. Next time you need a Business Loan, apply online; that is the clear winner.

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