Why Small Businesses Are Turning To Online Lenders – Yahoo Finance

Increased spending on online video is likely to continue and accelerate because, as marketers spend more to get their ads to play in front of videos, editors and publishers need more video to sell ads around. Thats great for platforms such as CNN and ESPN thatproduce their own video. But it means that other platforms with major audiences will need good video, too. The twin forces ofadvertising’s growing investment in video and the need for more of itare creating opportunities for your online marketing plans,especially if you run astartup. So, heres what you should be doing to take advantage of the trend: 1. Buy ads around online video now. While you may not be able to afford an in-house agency to analyze media spending trends, or drop $25,000 a month on a New York mega-firm, keep this in mind: Big online advertisers usually arent stupid. Spending on online video has been steadily growing because those who can afford in-house experts and ad firms are seeing (no pun intended) a return on that investment. It would be smart to learn from their decade of spending and learning. Moreover, as content providers push to put more video online, online consumption habits will follow.
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How You Can Take Advantage of the Online Video Trend – Yahoo Finance

One in five credit-seeking small businesses surveyed in 2013 applied to an online lende r, a Federal Reserve Bank of New York survey reveals. And former Small Business Administration head Karen Mills (now a senior fellow at Harvard Business School) reports that online lending is the fastest-growing segment of the small-business-lending market. The explosion in online lending to small companies has many financiers, regulators, pundits and policymakers wondering: Why are so small business owners turning to this funding source? The answer is convenience. Small business owners arent turning to online lenders to save money. Loans from Internet-based sources of credit are generally pricier than credit from banks and other traditional brick-and-mortar lenders. The cost of the typical online loan, it turns out, is closer to the cost of the median credit-card loan than price of a typical term loan or line of credit from a bank. One study by economists at the Federal Reserve Board of Governors calculated that the average interest rate charged on an online loan is approximately twice that on a traditional bank loan. Those running their own small companies arent moving to online lenders because their odds of getting funding are better with them than with banks. While online lenders loan-decision algorithms incorporate a wider range of information than most traditional small business creditors, allowing them to lend to borrowers with lesser credit scores, Internet-based lenders are actually less likely than banks to approve the loan applications submitted to them. A 2014 survey of small business owners conducted by the Federal Reserve Bank of New York found that online lenders had loan-approval rates of 39 percent , versus 59 percent for community banks and small regional banks, and 45 percent for large regional banks. Related: How the Decline in Community Banks Hurts Small Business Small business owners are turning to online lenders because the new creditors offer loan products that better fit their financing needs. These days, many small business owners do not need term loans to make major purchases, but instead require relatively small amounts of money to manage short-term cash-flow emergencies. Online lenders are well positioned to meet this demand.Their loans tend to be smaller in magnitude and shorter in duration than traditional bank loans, a report by consultancy Oliver Wyman and Company found.Many online lenders also offer cash advances against accounts receivable, a type of financing that is especially helpful in smoothing out lumpy cash flow.
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