The technology has enabled businesspeople to get loans from online lending companies. This is companies registered with the intention of making money available for the potential borrower. This business has influenced the banking industry to start online borrowing platforms. There are many advantages that one can draw from taking advantage of these companies. However, the main problem of borrowing from these platforms is the high cost of borrowing. Loans acquired from online websites attract a high interest than those borrowed from a bank or other financing institutions. How can one identify the best online lending company?
The Portfolio of the Company
The portfolio of a company is simply what the company says about itself. How does the company advertise itself? The best way to weigh the company is by looking into their website. Check and confirm that the company is registered with the relevant authorities. They should display the business license on the website. Registration is an assurance that the company is monitored and regulated by the government. This reduces the chances of the business exploiting customers and engaging in illegal activities. Identify other companies that associate with the company either as a partner or a subsidiary. What is the reputation of the other companies? Investigate the number of customers that are served by the company. The number of customers should be more than one hundred. The services should include borrowing of money, repaying of money and customer care services.
The Reported Profits of the Company
The amount of profits made by a company clearly shows whether the company is a going concern or not. This means that the amount of profit will enable the customer to identify whether the company can continue its operations shortly. Never borrow from a company that is likely to be closed shortly. Surprises are not good for any business endeavor. Some companies may fake their accounting recording to lure innocent customers. Be aware of such companies. Always ensure that the reported profit is audited by a professional firm. Besides the number of profits, be sure to check the growth patterns of the company. A company should observe the recommend corporate growth curve. The curve states that the company should observe a steady rate of growth in the early years of the operation. Afterward, the company should maintain a constant or a slow rate of growth. A company should not observe constant levels of profits. There should be fluctuations all through the years.
The Cost of Borrowing
The cost of borrowing is the amount of money that a customer will pay in addition to the principle. The government regulates the cost of getting a loan and mostly put in a range of 10 % to 30 %. Depending on the size company and the amount of loan, different companies will charge different interest. The interest is dependent on the amount of time the loan should be repaid after.