Surfing for Dollars

by Allen Plummer

Every business will eventually find itself applying for a loan. Whether for startup, expansion, equipment purchase, or construction, there will come a time when the money in the bank just isn’t enough to get the job done.

Applying for a business loan traditionally entails hours of waiting ­ in traffic, in line, at the loan officer’s desk. If you can get that far.

John Dalrymple started Blue Ribbon Mail Order in 1996, but the Lucedale, Miss.-based company always had a tough time getting financing. Even the most cosmopolitan banks cast a sideways glance at mail order companies, but Dalrymple’s rural location made getting financing almost impossible.

“There are no big cities close by ­ and our local banks are locally owned and operated,” says Dalrymple, who works and lives 30 miles north of the Gulf Coast and [more than a four hour drive] from either Jackson, Miss., or Montgomery, Ala. “Sure they’re business people, but they’ve never worked with a business like mine, so they were nervous.”

But now, a host of traditional and non-traditional banks and lending institutions offer term loans, SBA loans, asset-based loans, bridge loans, and revolving loans to any business with an Internet connection. Approval processes are the same: The business must supply a description of the use of loan funds; a detailed business plan with earning projections, overhead costs, and collateral; and a list of references. Any waiting that must be done can be in the comfort and convenience of the office or home. And shopping around for the best rate can be done with the click of a few buttons.

The benefit comes not only from the time saved or the ability to shop around for the best terms and rates, but for a business that may have had trouble getting financing in the past, the access to multiple lenders (many of whom are willing to think outside the box) could be the break they’ve been waiting for.

“The banks here just weren’t willing to take a chance on going into [the] mail order business,” says Dalrymple, “so we more or less just coasted ­ a dollar here, a dollar there. If we could get a 90-day loan, we’d take that.”

That worked for several years, but when Blue Ribbon Mail Order decided in January 2000 to get out of general merchandising, specialize in collectibles ­ Barbie dolls, Beanie Babies, porcelain dolls, and die-cast Hot Wheels ­ and create a Web site, Dalrymple needed a way to finance the change. He again started shopping the local banks, but came up empty handed.

“The banks still would not go with a mail-order business,” he says. So he hopped on the Internet and started shopping for a loan.

While surfing the Internet, Dalrymple came across, an Internet bank that offers a full line of traditional business services including payroll, benefits management, and, yes, financing.

“When I clicked on, I liked what I read. So I followed their guidelines and became a member of their banking system,” he says. “Three weeks later I applied for a loan.”

The application process was the same as it is at more traditional banks, but Dalrymple was able to do it on his own time. The form offers the ability to “save” if the applicant gets interrupted in the middle and needs to come back to it at a later time or date. Once Dalrymple completed the application and supplied all the necessary information, he clicked “Finished,” and waited.

OneCore offers approval within minutes for business loans ranging from $5,000 to $100,000, and 24-hour pre-qualification notification for SBA loans ranging from $100,000 to $3 million. And, like any other bank, if there are any questions or concerns regarding an application, a loan officer is there to talk with you.

“The loan officer called me three or four times in the process after I sent the application over the Net,” recalls Dalrymple. “They would call me if they ran into a question while they were processing it.”

Once everything was approved, forms were sent overnight express to be signed and returned, and then Dalrymple was notified by telephone and Internet that the loan was on its way. “I had the money in three days,” he says.

For Dalrymple, the decision of which lending institution to go with was clear ­ he was looking for a bank, not just a source of financing. But for the business simply looking for the best rate, the Internet also makes it easy to shop around.

Several services put the lender in the driver’s seat, leaving the banks to bid for the business. At the business customer fills out a five-minute application that includes basic information about the business and the principal owner. The information is submitted and processed instantly, supplying a list of financing options from 30 banks and lending institutions for which the business is likely to be approved. Instead of having to go from bank to bank, and taking the time to meet with a loan officer at each and fill out multiple applications, the customer can take care of it all in one fell swoop.

The list of potential loans is saved on the site for the business owner to go back to at any time. And when he made a decision as to which loan best suits his needs, LiveCapital forwards that information on to the lender. It may be necessary at that time ­ depending on the terms and amount of the loan ­ to supply more detailed information to the lending institution. The process is similar at, Commercial Finance Online, and Quickyes Corporation.

Online loans may seem simple, and they have even opened up the doors for businesses like Dalrymple’s to negotiate and contract with banks and lending institutions more willing to take a chance on non-traditional business ventures. But the basics of banking still apply. A business must have a solid application and a solid money-earning potential in order to get funding. Online approval has just made it easier for good businesses to get good loans at the best rate possible, and to do it on their own turf and time.

Small Business Computing Staff
Small Business Computing Staff
Small Business Computing addresses the technology needs of small businesses, which are defined as businesses with fewer than 500 employees and/or less than $7 million in annual sales.
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