Online financing is a type of financing that has emerged in the last decade as an alternative to traditional private financing as it was known a few years ago.
Before, when a company, an SME or a self-employed person needed financing for their business, they had no choice but to go back by the bank to obtain different financing alternatives; or go directly to your bank or usual box to request it, where you were offered generally more advantageous conditions.
With the emergence of the Internet and the development of new technologies, the online media has taken on weight in many sectors, and as it was not going to be less, also in the financial sector. This means that as these technologies have been developed, new business models have emerged such as online financing, among which is the alternative financing.
Online financing: what is it? How does it arise?
The online financing consists in making available to the client (in our case the company, SME or self-employed) the necessary resources to make an investment or to finance circulating by carrying out all the necessary procedures through the Internet in specialized platforms adapted to the online medium, whether alternative online financing platforms (known as Fintech) or traditional banking adapted to the Internet.
At the same time, the companies that have driven this online financing business model have been, for the most part, StartUps that offer alternative financing through crowdfunding, crowdlending, community shares, etc. That is to say, it has been this type of company that has been a pioneer in the business of online financing, with traditional banking being one step behind these platforms when it comes to implementing online financing as a financial product.
The benefits of online financing
Online financing has grown exponentially in recent years, with more and more financing platforms appearing in addition to the car of this booming business. Some of the benefits of online financing are:
Speed and ease of request
The majority of online financing platforms respond within a maximum period of 48 hours from the first contact in which the SME requests financing. Subsequently, it takes approximately another 48 hours to accept or deny the request, once all the relevant documentation has been delivered. This is what happens in the case of companies that seek financing online.
Flexibility, comfort, and control
Online financing offers the possibility to choose quantities and return modes. In addition, in many platforms like ours, you can orient yourself, and know, approximately the price of your financing. At the same time, you can control your loan from anywhere in the world and at any time of the day, 24 hours, 7 days a week.
Companies that request online financing can get convenient deadlines that fit their financing needs.
No small print. Online financing is what it is, so all the platforms that offer online loans have the obligation to expose the conditions of the loans in their web pages. 100% transparency
Online financing through crowdlending
One of the booming businesses in the online financing market is crowdlending platforms. This type of online financing puts investors, whether individuals or companies, in contact with companies seeking financing. This financing can be based on two types of financing:
- Crowdfunding of loans to companies or P2P Lending ( peer-to-peer-lending or peer-to-business-lending ): Debt transactions between companies and individuals.
- Discount of invoices or invoice trading: It is a type of crowdlending operations to finance collection rights, such as for discounting promissory notes.
Crowdlending as an online financing method has all the advantages of this, and in addition, many others like some of the ones that Jorge Segura, financial strategist, points out in his book ” CROWDLENDING: Invest as a professional “:
- Outside of banking intermediation
- The risk does not appear in the CIRBE
- Does not cross-sell other financial products or cross-selling
- The real total cost of a loan through crowdlending is lower
- Access to financing for segments of companies with greater difficulties in obtaining financing
- Collaborative economy
- Advertising for the company on platforms that contain qualified traffic (investors)
- Does not require mortgages on real estate banking style
- There is no penalty for repayment or prepayment
- Control over the data that is publicly exposed to the financing platform
What do you think of online financing? If you want to request your online payday loan with us, request it now at Citrus North index!