After the recent financial crisis, traditional banks are sometimes still reluctant to fund small businesses. Entrepreneurs need not be discouraged though, as a new trend has emerged in the world of finance: "alternative lending". What exactly is alternative lending and is it right for your business?
Alternative lenders are non-bank lenders. With faster underwriting and shorter decision processes, alternative funders have grown increasingly popular. Banks tend not to loan amounts less than $200,000, so alternative financing appeals to small business owners in need of smaller loans.
Types of alternative funding include term loans, merchant cash advances, factoring and equipment loans. You can apply for alternative financing online. Applying for online business loans requires less paperwork with a shorter wait period. You can often learn your fate in five minutes and receive funding in 24 to 48 hours. However, interest rates are often higher than those of traditional banks. Sources of online financing include:
• Non-profit lenders
• Invoice Financing
• Online Business Loans
• Loan Matching Sites
If you are in need of a small business loan in amounts of $200,000 or less, give us a call at 281-488-2022. We can help you explore these alternative funding options.