Until recent years, the primary source of small business loans and other small business funding was pretty much limited to banks, with venture capital firms or equity shares a separate and distant second. All of that has started to change, however, with the rise of alternative lending.
Alternative lending offers small business owners a greater degree of choice in small business funding, and provides additional options, greater access, and more customer-focused lending than can traditionally be found in banks.
Read on to learn more about the problems with traditional lenders, what alternative lending companies are all about, and how alternative lenders offer quick small business loans with online approval that can get your business the cash it needs to succeed.
The Problems with Traditional Lenders
There are several problems inherent to banks and traditional lenders, that can make them less-than-ideal sources of small business funding.
Briefly, these problems include:
What are Alternative Lending Companies?
Following the financial collapse of the late 2000s, credit rules and lending requirements got even tighter among banks and financial institutions, especially commercial banks that take deposits.
Their risk tolerance equally tightened up, making credit and small business loan products even harder to obtain than before.
Sensing an opportunity in the market, many new, alternative lending companies rose up to fill that gap, offering personal lending and small business lending services directly to clients.
Alternative lending companies are essentially private companies that only deal in lending. They don’t offer checking or savings accounts, investment accounts, or similar services. Rather, they specialize in either personal lending or business lending.
In the case of alternative lending companies offering small business funding, they offer a range of different types of small business loans and credit products that seek to overcome the aforementioned problems with traditional lenders and banks.
As with most aspects of the free market, this competition and choice provides small business owners with numerous benefits, as we’ll outline below.
Alternative Lenders are the Best Source for Small Business Loans with Online Approval
Alternative lenders are widely considered the best source for small business loans today. They offer quick small business loans available with online approval, matching the current pace and preference of most business owners who rely on technology.
At the same time, they offer a host of other benefits over traditional lenders in terms of small business funding.
These benefits include:
Small Business Loans from BizFly Funding, a Leader in Alternative Lending
BizFly Funding is a leader in alternative lending, and your go-to source for a full range of small business loans and small business funding products.
They’re solely focused on providing small business funding, and have been at the forefront of alternative lending in the US. BizFly Funding offers a fast online application, exceptional customer service, and easy qualification requirements.
They also offer tremendous speed, providing funding for many of their small business funding products in as little as 1 business day following approval.
To learn more or to apply for a small business loan today, visit their website at https://bizflyfunding.com.
Frequently Asked Questions about Alternative Lending and Small Business Loans
Alternative lending refers to lenders who are not commercial banks or traditional financial institutions. Rather, these are private companies, that do not take deposits or offer checking or savings accounts.
They typically focus on a particular category of lending, such as personal lending or business lending. Alternative lending companies often offer their services online, which is more convenient than the traditional branch office model that banks utilize.
They offer several advantages over banks, including easier access to small business loans, faster approvals, faster funding, and better customer service.
In short, for small business owners looking to apply for a small business loan or any kind of small business funding, alternative lending companies are often the best choice.
Many alternative lending companies offer specific types of small business loans designed for businesses with bad credit or limited credit history.
In many cases, these are regular, long-term small business loans, but designed so that even businesses with credit scores as low as 500 can qualify.
They typically have a minimum time in business and monthly revenue requirements as well. In general, even aside from these kinds of special small business loans, it’s easiest to apply for a merchant cash advance as a form of small business funding.
It operates somewhat differently than a traditional small business loan, but provides affordable capital fast, even with bad credit.
One of the types of small business loans that are offered by many alternative lending companies are known as debt consolidation loans.
These are loans designed specifically to help businesses to pay off multiple existing debts, and roll them into a single debt instrument. This can help businesses to save time and money, by reducing their service fees from multiple servicers down to one.
At the same time, by having a single monthly or weekly payment, rather than multiple payments spread at random times in the month, it can be easier to manage your business cash flow.
Small business loan rates are such that quite often, you can also save money by taking out a new debt consolidation loan at a lower interest rate than some or all of your existing debt.
Paying off higher-interest debt with a lower-interest small business loan just makes good financial sense, and can save you a ton in the long run.
Every lender is different, and each of the small business funding products they offer are also different. Therefore, the requirements to qualify at a particular lender for a particular small business loan or credit product will vary considerably.
There are some common themes, however. Most alternative lending companies have a minimum credit score requirement to qualify for their small business loan products.
They also typically have a minimum time in business requirement, on the order of a few months to a year or so depending on the type of small business loan and risk tolerance of the lender.
Thirdly, they generally have a minimum monthly revenue requirement, which can vary significantly.
In almost all cases, there is no requirement for any kind of money down to qualify for a small business loan, and most alternative lending businesses offer unsecured loans, meaning there is no collateral required, either.
There is no universal “best” type of small business loan. The best type of loan for your business may vary considerably from the best type of loan for another business.
Even within a business, the types of small business loans can be more or less appropriate given the intended use of the loan, current cash flow situation and projections, and other details.
In general, you want to try align the type of small business loan you choose with the intended spending purpose of the loan. Shorter-term needs might best be served by a short-term loan.
Flexible, revolving spending can best be handled by a business line of credit. More long-term projects can benefit from more standard, long-term small business loans.
If your business has a poor credit score, small business loans for bad credit customers, including merchant cash advances, maybe the best choice.
It’s useful to study all of the different options, qualifications, and benefits, in order to choose the best small business funding product for your particular situation and needs.