Do you pay all of your monthly bills with checks? If so, you are in the minority. With today’s technology, most people receive their wages via direct deposit. Then, their bills are mostly paid online through automatic deductions. It?s the new way to do business. So much of our lives is automated, and paying your bills is no different. For small business loan payments, the paper check is becoming a relic.
Alternative Lenders require small business loans to be paid back daily, weekly or monthly, and most require automatic bank withdrawals or ACH payments. There are very few Alternative Lenders that allow you to mail in a paper check each month.
When comparing online small-business loans, it?s important to look at not only how often you?ll be required to repay the loan but also exactly how you?ll be expected to repay. These factors affect your business?s cash flow and can result in fees if you?re not careful.
ACH Payments are Fast and Secure
Chances are high that any automatic bank withdrawals to pay off your small-business loan are made through the Automated Clearing House network. According to the network, it handles ?more than 90% of the total value of all electronic payments in the U.S.? Funds are simply deducted from your personal or business checking account whenever your payment is due.
There are no fees for using direct payments via ACH. You usually just have to provide the account and routing number from the bank. Withdrawals should help save your business time and stress: no setting up payment reminders, manually paying online or mailing in a check to pay, and no more late fees or missed payments.
E-checks also reduce the potential for errors and fraud as fewer people handle the transaction, according to Intuit QuickBooks.
Borrowers should still scrutinize their monthly statements to make sure the correct amount of money is being withdrawn from the account, just in case of an error. You?ll also want to make sure you have enough cash in your account to cover the loan payments, or else you risk an overdraft fee.
So when dealing with Alternative Lenders, understand that the ACH payment requirement should be no problem. It is convenient, secure and causes no issues for you or the lender. It makes it easier for you to make your payments, doesn?t cost any additional fees and ensures your payments are made on time.