In modern business, it’s common for clients to have many different options to choose from. This doesn’t just apply to retail stores and coffee shops — it also applies to financing. As a business owner, you have more options than ever before when looking for a loan. Many companies are choosing alternative lending to take care of their needs.
What Is Alternative Financing?
The term “alternative” lending refers to the opposite of “traditional” loans. Conventional loans are well and good, but they have a reputation of not being easy to qualify for. Of course, finding the right lender can make a big difference, but it’s still nice to have alternative options.
Bridge loans, invoice factoring, and merchant cash advances are all types of alternative financing. All in all, these alternative lending programs offer flexible ways to get capital for your business. Some of these options cover smaller needs such as operating expenses, payroll, and inventory, and others are powerful enough to help you purchase real estate.
Why Are Alternative Loan Options Popular?
The strength of alternative financing options has to do with their relaxed requirements. There are many types of alternative lending, but what they have in common are a relatively easy application process and fast loan approval.
In the past, these nontraditional loans were exclusively offered by small investors and private businesses. These days, many well-known lenders are beginning to provide alternative financing as the demand for these products grows. They’re especially popular with small businesses and companies with a less-than-ideal cash flow or credit score.
What Are the Advantages of Alternative Financing?
One of the benefits of this type of financing is that it’s easy to get approved for. Usually, your business’s credit score doesn’t play a large part in qualifying. There are other ways to mitigate risk.
Because of these relaxed requirements, loans are approved much more quickly. For example, a business looking to purchase a piece of real estate may turn to alternative financing to close as quickly as possible. An alternative loan can be ready to go in two or three weeks instead of the months of traditional loans.
Do you hate having to gather loads of documents just to qualify for a small loan to purchase inventory? Alternative lending lets you get the same working capital loan or cash advance with only basic paperwork.
When is going alternative right for your business? When you need a short-term financing solution quickly, they’re really hard to beat.