It’s tougher for small businesses to qualify for traditional bank loans these days. It’s one of the unfortunate outcome of the Great Recession. Nothing, however, can squash resilience and innovation for long. As a small business owner, you can find the resources you need to succeed by working with an alternative funding source. Here are a few of the reasons why alternative financing can be a good for your company.
The primary benefit of working with alternative financing companies is that they get you the cash fast. It starts with a simple and convenient application process, which can often be completed online in less than 30 minutes. Upon completion of the application, many let you know whether you’re approved within a few hours and deliver the funds within a few days. Conventional bank loans, by comparison, can take hours to apply for, and the entire process can take several weeks.
Quick delivery of funds is critical to your business in any number of situations. The biggest advantage is that it enables you to take quick action on unexpected opportunities to grow your business. For example, maybe a perfect piece of property for the new location you’ve been wanting suddenly becomes available. Perhaps you hear about a chance to get a great deal on some gently used equipment, which would help you increase productivity. Being able to obtain funds quickly allows you to take full advantage of these kinds of unpredictable opportunities.
What happens if a severe storm forces you to close your doors for a few days, or you experiencing the negative effects of a normal, temporary economic downturn? Getting your hands on some cash quickly can be the difference between keeping your business afloat and having to close the doors forever.
The competition created by the emergence of alternative financing companies is also good for small business owners. To attract your business, the companies are not only focused on making their processes more efficient, but also striving to improve customer service and the transparency of terms of the loan agreements.
The emergence of different types of alternative financing companies gives you the flexibility to choose the right credit product for your business and situation. Online balance sheet companies provide short-term loans based on your company’s debt and credit situation. Peer-to-peer companies specialize in medium-term loans from private investors. Marketplaces do the legwork for you, connecting you with the best traditional or alternative lender for your situation. You also have flexibility when it comes to loan collateral. Alternative funding companies are willing to consider many factors, including your future credit card income, credit score, and accounts receivable balance.