Why Direct Lenders Are the Best Choice for Business Loans

By: Kate Samano May 9, 2022

Sooner or later, your business is likely to need financing, either to sustain its operations or to grow them. But lending is a competitive field, and it can be hard to narrow down which type of lender or loan is the best fit for your company’s needs. The proliferation of lenders online has made it easier to find financing to some degree, but it has also made the decision more complicated. With so many lending options available, you might be overwhelmed as a small business owner, particularly since you’ve still got to run your business and can’t devote all of your time to picking a loan. Especially in cases like these, you’ll want to work with a direct lender for business loans rather than a consolidator. Here are just some of the reasons why.

Direct Lenders Reduce Your Costs

When it comes to borrowing money, your business should keep expenses as low as possible. This means you’ll want to eliminate nuisance fees, like “origination” or “setup” fees, and you’ll also want to cut out any middlemen that might take a cut just to refer you to another lender. You can avoid all of these fees by working with an online direct lender, as you’ll work one-on-one with an in-house lender that has little overhead and doesn’t need to charge extraneous fees. These types of direct lenders can often get you the lowest loan rates available as well, further saving you money. Picking low-cost direct lenders that have the solutions you need can add money directly to your bottom line by cutting out unnecessary costs.

Direct Lenders Will Work With You One-on-One

Direct lenders are in the business of providing financing solutions, period. If you work with a more traditional option, such as a brick-and-mortar bank, you won’t likely get the same level of attention. Bankers in particular are likely busy servicing a wide range of products, not just loans, and may not even have the depth of knowledge that a dedicated direct lender has. You might even fall prey to upselling, as a banker offers you insurance, investments or other products in which you have no interest. A direct lender offers financing options only and won’t be distracted from servicing your loan.

Direct Lenders Are Available 24/7

Online direct lenders are only a phone call away, and someone will be available to service your account 24 hours a day, 7 days a week. If you work with a traditional lender, you might have to deal with “banker’s hours,” where your loan specialist leaves the office at 3pm every day and isn’t available on weekends. There may not even be someone else available at the bank who can service your file. But an online lender has representatives available 24/7, and if your personal loan officer isn’t available, someone else at the firm can pull up your file and assist you at any time. Since you’re likely busy during traditional business hours running your company, this type of flexibility can be invaluable.

Direct Lenders Can Get Creative

Direct lenders dig down into what your actual needs are as a business. While you may think you just need a simple five-year, fixed-term loan, a direct lender might show you how alternative financing options might work out better. For example, you might want to take out a loan collateralized by your assets, a variable-rate loan, a merchant cash advance or a myriad of other options. Some banks might only be willing to give you a traditional loan, but direct lenders can often get creative and offer you a range of options that might be a better fit for your needs. This is particularly true if you find and stick with a good direct lender that knows your business inside and out.

If All Else Fails, Direct Lenders Can Refer You

The top direct lenders have both the best rates and the biggest variety of loan options available, along with the professionalism to outsource your loan if they can’t offer you the best possible match. That’s perhaps one of the best reasons why you should deal with a direct lender from the very outset. On top of all of the benefits that direct lenders provide, as listed above, you have a fail-safe that you’ll still end up with the best loan if for some reason your direct lender can’t serve you. That being said, this is probably an unlikely occurrence if you deal with a top-tier direct lender. Still, it offers some peace of mind that you’re not starting in the wrong place to begin with if you go with a direct lender. 

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