4 Reasons To Consider An Alternative Lending Option
If your small business is trying to expand, start a new project or simply keep up with regular expenses during a slow period, you may find yourself in need of funding. The first thought of many business owners is to apply for a bank loan. While this is not necessarily a bad idea, it might not be the best option for you. Alternative lending is a great choice for many entrepreneurs and offers some benefits that you may not get from a traditional loan.
1. More Flexible Terms
When you borrow money from a bank, you have to follow their terms and conditions. Depending on the current financial state of your business, these can be unfavorable in the long run. With an alternative lender, you may have access to terms that are more flexible and better suited to your needs.
2. Easier Qualifications
For small companies, particularly if you haven’t been in business for very long, it can often be difficult to qualify for a traditional loan. Alternative lending options will generally be easier to qualify for in this case. They may be more open to providing loans to businesses that have been around for less time, have less valuable collateral or make a lower annual revenue. They may also be more forgiving when it comes to bad or limited credit history.
3. Quicker Access To Funding
Even if you qualify and are approved for a bank loan, that doesn’t mean that the money will be immediately available to you. The approval process itself can already take quite a bit of time and getting your money afterward may take weeks or even months. If you are in need of quick cash, an alternative loan can be a much better option for you. Some lenders may be able to provide you with your money in as little as a week or less.
4. Lower Interest Rates
Interest rates for bank loans can be quite high, especially if you are not an established and financially secure business. Many alternative lenders will offer loans with lower interest rates and monthly payments that are easier on your company.
When it comes to loans for your business, there are more options than you may be aware of. You don’t need to borrow money through a traditional bank loan if you determine that’s not the best choice for you. Look into alternative lending options to see if there is one that better suits the needs of your business.
