Alternative Lending: Clearing up the Confusion

Small business owners often cannot qualify for traditional bank loans, but that doesn’t mean they won’t find the funding they need to grow. Cutting through fake news about alternative lending opens up many more possibilities for financing.


You Don’t Need Spotless Credit


Many alternative lending products do not require the company or business owner to have unblemished credit. Companies with considerably lower scores or payment histories that include multiple late payments may still qualify for funding by selling accounts receivables or percentages of their future debit and credit card payments. While poor credit commonly affects the price for financing, it does not always mean the application will be declined.


New Businesses Can Qualify


Entrepreneurs who are just starting their companies may choose to borrow rather than give up equity at this early stage in the business lifecycle. By definition, startup loans do not require an operating history for loan approval. The owner’s personal score is typically one of the most important qualifications for approval. Having a solid business plan can also be important to qualify.


Pricing is Competitive


The increase in alternative lending options available online from financiers around the country naturally keep prices competitive within alternative loan product categories. While interest rates and fees may be higher than traditional bank financing, loan approvals are often possible in cases when businesses cannot qualify for bank loans at prime rates. Loans prices also vary depending on the strength of the borrower’s credit, payment history, length of time in business and overall risk profile.


Applications Can Be Approved Quickly


Many lenders get cash into the hands of borrowers in as quickly as two days. Applications are often completed in no more than an hour with underwriting finished in little more than a day. Business owners have the opportunity to streamline the approval process when their bank and card processing statements are well-organized, and they have previously confirmed that their credit scores and payment histories reflect accurate information.


Lenders Care About Helping Your Business Succeed


Because of the internet, business owners are not limited to shopping for credit from their home town bankers. Online lenders serve small businesses in every corner of the country. The relationship between a business and its financier can be a close partnership regardless of location. Alternative lending options regularly deliver important financing that helps America’s small businesses grow. Before deciding that bank loans are the only answer, business owners should explore the flexible financing products that are now regularly available.

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