The industry of online small business loans has found itself in the crosshairs of major financial regulators following the influx of major banks moving into the industry. Online lending regulations have not been focused on as heavily until recently, and the outcome remains to be seen. Fast and Easy Funds, an online lender, is confident that if other lenders follow the rules and obey the law, there is nothing to worry about.
Currently, online lending regulations are tied closely to individual and consumer loans, and the difference is not clear. Financial regulators are said to have begun attempting to find a clearer definition.
An article in the Wall Street Journal explores online lending regulations and the financial sector’s sudden interest in further regulation of the industry. The reason for the sudden interest is of course the fact that major banks have entered the industry, and online small business loans have increased by 60% since 2014.
Interestingly, the reason online small business loans have been such a great source of capital for many businesses is because online lenders were able to take risks on companies in the first place. Big banks remained apprehensive when awarding loans to businesses without high credit scores or solid credit histories, and that may have been because of large scale regulation.
The initial goal for online small business loans is greater transparency and comparison of rates. These are regulations most can get behind and will likely be in effect rather soon.
If you have been keeping up with the latest news regarding business loans in the first quarter of 2016, you are aware that a lot is happening. Loan approval rates are on the rise and major banks are loosening up restrictions. Of all the loans available to companies in the United States, a recent report shows that most businesses are turning to “cash advances”, also known as “merchant cash advances”.
A study conducted by the Federal Reserve Bank suggests that entrepreneurs want loans that act as lines of credit, which is why most are choosing cash advances. The Fast and Easy Funds cash advance works like a line of credit and can be renewed as many times as needed, as long as 50 percent of the original loan has been paid off. The Federal Reserve Bank further reports that 57 percent of entrepreneurs are choosing cash advances over any other loan.
Everyone knows that loans are always paired with penalties and interest rates, but cash advances work a little differently. Cash advances are awarded and calculated using an estimate of future sales and the businesses repays the loan out of a percent of the sales made on a weekly or biweekly basis. The business enjoys the benefits of using the loan as a line of credit, and monies can be acquired easily by drawing directly from the fund. Although seasonal businesses are often the most apt to choose a cash advance over any other loan, many other businesses are choosing this form of credit over other loans.
It’s 2016 and Wells Fargo has decided to get into the online small business loan venture. It’s unusual for a big business to attempt to gain market share in an already established business model and analysts are speculating that the bank might be anxious because of all the potential business they are losing to alternative lenders. One of the biggest hurdles Wells Fargo has to overcome is the easy business financing that alternative online lenders are known for. Put another way; the online lenders are just much faster than big banking institutions and loans are always time sensitive.
While Wells Fargo fights to match the speed of online business loan companies, their rates and strict rules may still deter a lot of the businesses that turn to online business loans. The new Wells Fargo online business loan venture’s interest rates range between 13.99% and 22.99% and the bank still puts a lot of weight on the credit score of the company that is getting the loan.
The answer is definitely ‘yes’, Wells Fargo wants to take over online lending’s, but can they? They are late to game already and there are plenty of well-established and respected alternative lending companies that are known for easy business financing. A representative from Wells Fargo said they were playing around with the idea of partnering with an online lending company but decided against it, stating they would be able to provide a better product if they created it themselves.
Fast and Easy Funds is an alternative online lender with experience, speed, and great rates. When it comes to your small business loan, trust the best and trust the experienced.
Wells Fargo has done the unprecedented and implemented the first ever, online small business loan venture – something that has never been attempted by any major bank until now. Large banking institutions have been notoriously uninvolved in the online small business loan market, and to say this is a monumental moment in the loan industry would be an understatement. Easy business financing for small businesses has never been a priority for big banks, so the obvious question is why now?
Speculation might lead to the conclusion that big banks are starting to notice that online small business loan companies have become not just a viable option, but the preferred option for small business owners. Why? Put simply, online business loan companies have always promised easy business financing in terms of merchant cash advances, asset based lending and easy term loans and credit scores are not treated as an eliminating factor as compared to big banks.
Online small business loan professionals took the market originally because big banks did not want to risk financing small business. Now that companies like Fast and Easy Funds have proven that these loans are viable, big banks are attempting to take the market. It will take a long time before the market changes completely, but there’s one thing for certain: banks have seen that providing easy business financing for small businesses online is not just an option, but the new standard for lending services.
Approvals for small business loans are rising, so does this mean the ‘great recession’ is over? Well, not exactly. Banks loans typically have an ebb and flow, and the market might show an eruption in approval rating in one quarter and then a sharp decline over the rest of the year. One thing this point illustrates is that fact that people are taking risks to start their companies and banks are financing those risks. Independent loan companies like Fast and Easy Funds are an option that many small business owners might want to consider as an alternative to these bank loans.
Experts point out banks have had a long history of refusing loans to small businesses, which is why alternative lenders like Fast and Easy Funds have stepped up to the plate to help businesses in need. So why the sudden change? It’s difficult to say. At the moment we only have the figures and they suggest that small business loans are being approved to a larger extent.
Should I get or look into small business loans? The problem with taking loans from banks is that the repayment responsibilities can often times be quite harsh and steep. Although very few outlets are commenting on the new sudden rise of small business loans, nothing is for certain yet. Buzz surrounding the online small business loans service Chased launched earlier in April suggests that more loans might be on the horizon; and with those loans will come higher and higher interest rates.
In December, the American government announced that 211,000 new jobs had been created and delivered by the U.S. economy in the month of November, keeping the unemployment rate at 5%. This huge announcement set off a wave of debate and discussion on if and when the Federal Reserve will finally make the decision to raise interest rates in their upcoming December meeting.
A fast survey revealed that the Federal Reserve has the green light to raise the interest rate. So what does this mean for all small business owners in the U.S. and their access to capital? Fast and Easy Funds, an independent lending company that offers working capital for small to medium sized businesses, weighs in on the possibility that the Fed may raise interest rate.
Now that small companies are picking up in business and jobs are increasing at a strong pace, business owners are gaining confidence in their ability to dip into cash reserves or take on outside capital to expand their business. The economy has strengthened significantly, and the zero percent rates should be reassessed to begin the normalization process.
The zero percent rate was put in place by the Federal Reserve as an extraordinary measure to help boost the economy during the recession. Increases are expected to be slow and gradual, so that small businesses should feel little impact. The bottom line is that small businesses will benefit significantly more from a strong economy, which is associated with higher interest rates.
The Federal Reserve is meeting on December 15 and 16 and will announce their decision soon thereafter. Fast and Easy Funds knows that if they do decide to hold off on raising rates, it will not be for too long.
There probably is no person on this planet that enjoys rejection. No matter what form of rejection, whether it be a “no” from your dream job, the person that you are in love with, or the bank regarding a loan application, it cuts you to the core.
If you are a small business owner, then you have probably received one or more of these rejections from a lender. In the first half of 2014, out of all of the small businesses that applied for financing, only half received the financial assistance for small business that they were looking for.
Fortunately, Fast and Easy Funds has a fast application and approval process for working capital that allows for the majority of applying companies to obtain help, allowing businesses to grow and succeed. At Fast and Easy Funds, we realize that many institutions do not approve loan proposals and we hope to answer the question as to why so many business owners are denied for small business loans.
– Bad or no credit at all. Banks will generally look at both a personal credit score and a business’ credit score to decide if they will lend to them and determine interest rates. The most common reason businesses get turned down for loans is having no or low credit history.
– Weak cash flow or the inability to prove cash flow. Lenders want to see that a business will have enough income to make their monthly payments after covering all of the business’ expenses.
– Poor planning and preparation. Many small companies get turned down for loans simply because the owners are not prepared. Some businesses are just not savvy when it comes to the application process, hindering them in the end.
– They are lacking collateral. Lenders will often require collateral before they can agree to lend. New businesses may not have acquired any significant collateral yet and are unwilling to use personal property.
– Banks want to avoid the risk of lending to small businesses. Since the financial crisis of 2008, many banks had to raise their lending standards in order to avoid taking on too much risk. Lending to a small business is risky for a bank.
Fast and Easy Funds’ cash advance means that you can receive a business loan that will provide your company with extra cash money, so that your business can continue to expand or cover unexpected costs. A business cash advance is a short term loan that you are able to take against your credit line or business, up to a certain amount. If you are in the midst of a difficult financial situation, a Fast and Easy cash advance should be considered to help you cover necessary business expenses. The following are the perks to taking out a Fast and Easy cash advance:
- Easy to apply and qualify: Applying and qualifying for a Fast and Easy cash advance is incredibly easy, since the only limitations are that your business has sufficient income and you have never defaulted on another loan in the past.
- Information security: When you apply for your Fast and Easy cash advance, your personal banking information is secure, meaning that Fast and Easy Funds will never lend it to other companies without your permission.
- Fast: Filling out a Fast and Easy application and receiving a cash advance only takes a few minutes.
- Flexible: Fast and Easy Funds’ cash advances are short –term, and once it has been paid down to half of the original loan amount, the cash advance can be repeatedly renewed.
- Invaluable in case of emergency: Cash advances are invaluable when you need money for unexpected expenditures, such as bills or pending fees.
- Convenient: Fast and Easy Funds is available outside of regular banking hours, which will allow you to obtain money for your business at any time. Fast and Easy funds also allows you to apply for a cash advance online!
In today’s market, taking out a small business loan can be a scary thought. On top of taking on debt in a down economy, getting a small business loan can be complicated, but you shouldn’t always believe everything you hear when it comes to small business loans. Fast and Easy Funds makes applying and receiving small business loans seem like a cake walk.
Here are three small business loan myths that Fast and Easy Funds wants you to think twice about:
- Myth 1: Getting a small business loan is one of the hardest things you will ever do.
Getting a small business loan for your company is not an easy task, but this does not mean that it is an insurmountable trial. Fast and Easy Funds believes that preparing yourself for the challenges of applying for a small business loan can help you avoid most troubles.
- Myth 2: You have to have perfect credit to get a Fast and Easy small business loan.
Many people believe that since low credit scores in the past stopped a loan approval in its tracks that they need perfect credit to get a loan today. Today’s lending environment is actually more open to subpar credit ratings than ever before. Alternative lending sources, such as Fast and Easy Funds, tend to base their lending decisions on the basis of the financial realities of a business.
- Myth 3: The bank is the best way to obtain a small business loan.
For business owners looking to borrow a relatively small sum, sometimes getting a bank loan is actually more trouble than it is worth. Getting a loan through an alternative lending source, such as Fast and Easy Funds, is also much faster than obtaining a bank loan.
Fast and Easy Funds offers the best lending program in the United States for growing businesses. Since Easy Term Loans from Fast and Easy can be given on an individual basis, they can often be used for small business loans that can be used towards expanding your landscaping company. Once you have established your landscaping company and made it past the impediment five year mark, there are many ways in which an Easy Term Loan from Fast and Easy Funds can benefit and further grow your landscaping company. Here are some excellent ways to put your Easy Term Loan to good use:
- Invest in newer and specified equipment- Having specialized equipment and new machinery means that your landscaping company can take on larger more complex projects and will give off the appearance of a more professional company.
- Hire the right employees- You could use the Easy Term Loan to hire employees that possess specific skill sets. For instance, you can hire a mechanic that can work on your landscaping equipment and eliminate any down time.
- Expand your working capital- Taking on landscaping projects without any capital is impossible and a fast way to dig your company into a hole. You can use your Easy Term Loan from Fast and Easy to use as working capital and take on larger landscaping projects.
These are just a few ways that you can put your Easy Term Loan from Fast and Easy Funds to use to grow your established landscaping company. Fast and Easy Funds offers low monthly payments and can move you through the approval process, giving you access to funds in as little as two weeks. Call today to start your Easy Term Loan application!