Small business owners need loans to help grow their companies, yet many face hurdles when trying to secure financing. Small businesses have different needs than large corporations, and they often have a hard time finding a lender who is willing to meet those needs.
The solution may be obtaining financing from a direct lender. Direct lender loans are becoming more popular because they allow small businesses to get the money they need with little hassle. These loans are also ideal for newer or struggling businesses that may not have a good credit history with traditional lenders.
Keep reading to learn more about direct lender loans, including what they are, their advantages, and how you can apply for one.
What is a Direct Lender?
A direct lender is a financial institution that provides small business loans directly to borrowers. A bank or credit union, for example, might not be able to offer you a loan because of your poor credit history and lack of collateral. In this case, a direct lender could be the better option for financing your business because they don’t use middlemen like banks or credit unions do. They simply connect with business owners who need capital and then grant them loans based on their own criteria (which may include factors like income).
What are the Advantages of a Direct Lender Loan?
The biggest advantage of a direct lender loan for small businesses is that you don’t have to deal with middlemen such as banks or credit unions that have stricter requirements and lengthier application processes. Many banks require collateral, for example, which can be tricky if your business is just getting started and doesn’t have much in the way of assets.
Direct lenders can be found online or offline, however, online lenders tend to have lower overhead costs due to their digital nature. Therefore, they can offer more competitive rates than traditional brick-and-mortar institutions do.
Direct lenders are also good for businesses that have less-than-perfect credit. If you have a bad payment history or have been turned down by other lenders, direct lenders can help your business get the cash it needs fast.
Finally, direct lenders also make it easy to apply for a loan and get approved, so you can use the money in as little as 24 hours.
Can You Get a Direct Lender Loan if You Have Bad Credit?
If you have bad credit, it’s still possible to get a direct lender loan. Direct lenders tend to be more forgiving than traditional banks when it comes to credit scores and other factors, so if you have bad credit but need a loan, direct lenders may be your best option.
The key is to find a lender that will work with you, and there are many out there that do. If you do have bad credit, it’s also important for you to make sure your loan will be affordable and manageable.
Is My Business Eligible for a Direct Lender Loan?
To qualify for a direct lender loan, you must have been in business for at least six months and have over $10,000 in monthly sales. Although direct lenders have less stringent requirements than traditional lenders, such as banks, they must still ensure that a business is stable and profitable before entering into a loan agreement. If the lender doesn’t think your business is stable enough, they may not approve your loan request.
How Can I Apply for a Direct Lender Loan Online?
The application process for a direct lender loan is simple, and it can be completed in just a few minutes. Start by gathering relevant documentation, such as business and personal bank statements, your company tax ID, and any additional information outlining your company’s revenue and debts.
Then, launch the loan application form on the direct lender’s website and follow the prompts. You should receive an outcome within just 24 hours, and if approved, you can expect your funds to be deposited into your nominated bank account in as little as 48 hours.
Need a Direct Lender Loan for Your Business?
As you can see, there are many benefits to working with a direct lender. With no middleman involved, like a bank or credit union, you can get your loan approved faster. This means more money in your pocket to help your small business prosper.
If you need a direct lender loan to help keep your business afloat, Zinch can help. Contact us at (714) 500-6622 to learn more about your options. You could qualify for up to $250,000 in just 24 hours.
