Is Alternative Financing the Answer for You?
Banks seem to run a monopoly on advertised lending programs for small businesses. If you are looking for a loan or other type of funding for your business, you wouldn’t be the first to assume that the bank is your only option. Luckily, it isn’t, and there are many other providers who can help you secure funds through means other than a traditional loan. In many cases, these alternative financing programs offer better interest rates, greater flexibility and more accessible approval standards than loan options from standard lenders. Your business can greatly benefit from these features and grow exponentially.
One of the biggest ways alternative funding programs can help your business is by slashing the amount of time it takes to receive funds. Very few bank loan applicants are actually approved, but they all must still go through the rigorous qualification process the bank sets forth. Gathering the required documents and data is a task in an of itself, and then once that is completed, you will likely have to wait weeks to learn whether or not you are approved. Alternative financing sidesteps all of these processes and gives businesses other ways to get funding. You may secure capital by selling future profits or by factoring invoices. Since the application requirements are often less strenuous, the approval process is, too. You could receive a decision on your alternative funding application within a few days.
Alternative financing can also help you business by offering high approval rates. As was mentioned, the vast majority of businesses that apply for traditional lending from banks are denied. This is because approval often requires an impressive and extensive history of considerable profit, and not all businesses can supply this. Most other options base funding on other factors, and many do not even factor a business’ credit rating into their decision. Since your application is considered with more factors, it is easier to get an approval.
One of the last benefits of alternative financing is its low interest rates. Banks may advertise lower interest rates than those offered by alternative financers, but these rates can often become inflated. Alternative lending is also accessible to small businesses and mid-prime borrowers to whom loans would typically be offered with higher than usual interest rates. Alternative funding usually carries clear and easily understood terms, including for interest. Alternative funding can be beneficial to your business in many ways. If you are ready to grow and increase your profits, an alternative loan may be the right choice.