Why Alternative Lending Has Become So Popular Amongst Small Businesses
Every business needs funds to thrive and grow. For a small business, funds may be needed to buy equipment, purchase supplies or inventory, hire new employees, ramp up marketing, or cover shortfalls in working capital. But sometimes it is difficult to get a loan for a small business, especially from traditional banks and credit unions. The issues that small businesses face include poor or insufficient credit history, lack of collateral, large debt or low income, insufficient capital investment on the part of the business owners, and weak cash flow. An increasingly popular source of funding is alternative lending.
What is Alternative Lending?
Alternative lending sources are those that are outside of traditional banks or credit unions. Alternative lenders are typically private companies, often online lenders, that operate just like a bank or a credit union. They can offer a range of financial services including term loans, equipment financing, invoice financing, term loans, and lines of credit.
Advantages of Alternative Lending
Alternative lending has become popular because of these advantages:
• The application process has been made easier and simpler compared to traditional lending sources.
• Can be approved more quickly, often in a matter of a few days or less compared to weeks or months with traditional lending.
• Underwriting for alternative lending is much more flexible than traditional lending.
• There is a diversity of loan options.
Disadvantages of Alternative Lending
While alternative lending offers some compelling advantages, there are some downsides as well. These loans typically come with higher interest rates. As well, approved loan amounts can be smaller and have shorter repayment periods. Sometimes more frequent repayments are required.
How To Improve Your Chances of Getting Approved for a Loan
Increase your chances of getting approved by creating a strong business plan, make sure your credit is strong, secure collateral, and make moderate investments in your small business.
Seek Expert Funding Assistance
Contact Quick Capital Funds for expert alternative financing assistance. We offer a range of options to meet your needs and help you reach your goals.