Online financing for small businesses has increased in recent years after traditional banks tightened their credit parameters in the midst of the Great Recession. To fill a huge need for small businesses, online lenders have become more ubiquitous — not because of less stringent lending requirements but because of a host of benefits they offer to small businesses.
Equipment vendors should take note because, according to Intuit, purchasing new equipment is cited as the number one reason for small business financing. The market is clearly there. So exactly why are entrepreneurs electing to finance these purchases online rather than through traditional means? Let’s find out.
Applying for a small business loan online is much easier and faster compared to traditional banks. This is largely due to the Amazon influence on consumer culture — people want to find exactly what they’re looking for and expect to get it fast. When business owners visit your website, they’re not just shopping for a product, they’re shopping for a customer-centered experience. Vendor financing makes this possible because you limit the barriers to purchase and convert more online leads.
2. Broader Loan Products
Small businesses don’t necessarily need a huge sum of cash for large objectives. Oftentimes, they may just need the money for short-term needs or a one-time purchase from equipment vendors. That’s where online lenders come in. They offer broader loan products and financing options that work with a wider range of small business types. At CMS Funding, we also offer shorter loan terms, which is helpful to companies that just need to finance a specific purchase and then move on with their other business objectives.
3. Faster Funding Times
Not only does vendor financing through online lenders help decrease the time it takes to apply, it also speeds up the disbursement process. Money isn’t the only important resource to small business owners; they also value time. Equipment vendors who help expedite the funding process can increase the likelihood of closing a deal with small business owners.
4. Trusted Relationships
Small business owners want to work with a name the can trust. If they’re already shopping your brand, they’re more likely to complete the process if you offer a vetted lender partnership. It’s important to create a balance between convenience and confidence in both your product and financing opportunities.
At the end of the day, the best way to build a business is to create authentic relationships with your customers by enabling them to make the best decisions for their company; offering trusted vendor financing is a great way to do that.