As a small business owner, getting the loan you need to help your business thrive can be challenging. Banks often seem to focus on loan products for people with years of success, excellent credit, valuable collateral, and a need for large funding amounts.
If your business needs funding to take the next big step or support daily operations and banks are not receptive, there are alternatives. Some lenders have created programs that fill this void in lending products.
Why Alternative Lenders Approve More Financing Applications
According to Forbes.com, most small business owners don’t meet the new stringent criteria of conventional lenders. But alternative funding changes the focus from your credit history to what actually matters, the overall health of your business and its potential.
It has been the ideal solution for those with an entrepreneurial mindset because it allows them to fund an opportunity for business growth as it arises. With quick approval and funding times and a much simpler process, what used to take several months can now be done in a couple of days.
Is Alternative Funding Right For My Business?
There are other lenders that think outside of conventional loan guidelines. They offer small business loans, lines of credit, cash advances, A/R financing, and other creative funding options that are more flexible than bank loans and tailored to fit your business needs.
Alternative lenders offer small business loans with less stringent credit requirements, perfect if your business has been doing well, and even if it has gone through a series of ups and downs.
They have a fast application process. You get answers quickly and although interest rates may be slightly higher than a bank, you stand a greater chance of approval.
Alternative lenders don’t make you wait 30-90 days for your money. They offer fast solutions, so you can get the cash in hand quickly.
It is not a problem if you are a start-up or your business is new and lacks an established credit history. The application looks at the overall health of what you created and trusts in your ability to take it even further.
Meeting the Credit Challenge
There are many options outside the bank that could be a much better fit for your business. We’ll cover two of them below:
According to entrepreneur.com, more than half of small business owners seek financing from an alternative lender. Alternative loans provide funding options, including working capital loans, with more flexibility, speed, and ease than banks, credit unions and the Small Business Administration.
The application process is simple and straightforward and the terms and repayment options can be customized to fit your sales volume and the most-desired time-frame for your business. Because they look at your business’s health, success is part of the equation.
Lines of Credit
Similar to credit cards, but with lower interest rates, lines of credit are typically unsecured, so they don’t require collateral and long repayment time-frames. According to businessweek.com, lines of credit are based on a percentage of the value of your business (assets, inventory, and accounts receivable), not your credit score.
With a business line of credit, you only borrow exactly what you need and your interest is based on what you use, not the full amount available.
https://www.credibly.com/wp-content/uploads/2015/07/Crowdfunding.jpg560711adminhttps://www.credibly.com/wp-content/uploads/2018/04/CrediblyLogo-1-300x138.pngadmin2015-07-21 10:26:302018-05-31 10:04:26Alternative Funding for Small Businesses