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Four Reasons Why Small Businesses Should Partner With An Alternative Lender
If you’re a small business looking to get some liquidity, you will most likely turn to a traditional lender for securing funds. Well, that’s the first thing that usually comes to our mind. However, the chance of getting your application approved is minimal and depends on various factors. Yes, traditional funding services are challenging if you are a small business owner, but that doesn’t mean all roads are closed for you to take your business to the next level. If you are stuck in such a dilemma, then turn to small finance companies to get funding for your business with minimum hassle.
Before we start talking about why small businesses should partner with an alternative lender, let's understand what is alternative lending. Alternative lending, as the name suggests, is lending outside the traditional financial sector. They are an 'alternative’ to banks and credit unions. The most significant advantage of it is, a small business stands a higher chance to qualify for it as compared to traditional financing.
Different alternative lenders offer different options like short term credit, lines of credit, invoice financing, etc.
Benefits of getting associated with small finance companies:
While bigger banks have an approval rate of between 13% and 20%, small finance companies have an approval rate between 61% and 64%. Hence, it is evident that the chance of approval for your funding application is much higher with an alt-lending.
There is less paperwork as compared to traditional lending. They don't ask for a perfect credit score, unlike a traditional lender. The underwriting process is fast, and with digitization, almost everything is online. Hence, the process is faster and flexible too.
If your past application has been rejected by a traditional lender and if things have not improved for you since then, alternative lending is going to be your best friend. Alternative lenders accept applications from small business owners of all groups, giving them a chance to improve their business revenues.
Alternative financing offers different types of solutions, particularly targeted for small business owners. Hence, you can find some unique solutions that are tailor-made for your specific needs. For example, you can use a piece of equipment or an outstanding invoice as your collateral to get alternative financial funding. Or, you can get business credit cards to help you deal with operational expenses. If you need a small amount of money for a short period, then an alternative lender can help you in that too. For an amount between ,000 and ,000, you can get easy and superfast approvals from an alternative lender as compared to a traditional bank.
We hope you have received a fair insight into alternative business funding and why it is beneficial for small businesses. If you are looking for a speedy and easy application process, quick approval of your application, flexible underwriting, and diverse financing options, alternative financing is your best bet.
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