Within the USA, there are multitudes of traditional banks and credit unions, and yet small businesses face almost insurmountable problems when they attempt to obtain the funding that they require. The solution that many of them have discovered is alternative lending. Below is some information to be sure alternative lending is right for your business.
Alternative Lending Basics
The term alternative lending applies to the financing offered by lenders other than traditional banks. These lenders are often private companies that are based online. They offer many of the same financial products as banks. Although, their requirements are not as stringent, and their application processes are not as ponderously slow and difficult. Usually, the entire process from application to approval can be completed online.
Alternative Lending Options
Finance companies that specialize in alternative lending provide a variety of options. Making it possible for almost any small business to find the necessary funding. Besides standard term loans, lenders also offer business lines of credit, which allow you to borrow funds up to a set limit, and then when you pay them back you have access to the same amount again. Merchant cash advances give you an advance that you pay back with a percentage of future credit card sales, and invoice financing provides you with an advance based on unpaid accounts receivables. Equipment financing offers you loans specifically to purchase equipment using the equipment you buy as collateral.
Benefits of Alternative Lending
One of the main advantages of alternative lending is how quickly and easily you can apply for funding. Once your application is approved, alternative lenders are also extremely fast in getting the funds to you. Even if your company is unable to qualify for a traditional bank loan, you can obtain the capital you need to hire personnel, purchase inventory and equipment, market your products and services, and expand your business.
For more advice on alternative lending as a funding source for small businesses, contact Capital Finance Partners.