As a small business owner, you likely leave no stone unturned when it comes to financing your company and your commercial goals. You may have heard of something called “alternative lending” and have the same reservations about it that you have for alternative music. To get a better idea of just what type of lending this is and the benefit it could hold for your business, take a traditional approach to learning about this alternative business financing option.
What It Is
Simply put, alternative lending is any type of lending that falls out of the realm of traditional bank financing. One of the most common obstacles for small business owners is securing loans from traditional banking institutions. Technology has not only changed the way we do business, but the way we fund our businesses as well, providing small business owners with more options to get the funding they need to lift their companies of the ground.
Examples of some of the sources of collateral alternative lenders use include real estate and unpaid invoices. These lenders usually aren’t as rigid about their lending requirements and terms when compared with standard banks. For instance, an alternative lender can get you your cash faster and offer flexible repayment terms. To help reassure you about the types of lenders you’re likely to deal with, know that alternative lenders are often well-established and supported by well-regarded individuals operating in the financial services community.
The Nitty Gritty
For all of the benefits, there are some pitfalls associated with alternative lending. One of the largest is that the interest rates for alternative loans can be higher than those for traditional bank financing. Even with these high interest rates, some small business owners feel they are a tolerable trade-off for the opportunity to supply their companies with a flow of cash and keep things up and running during hard financial times.
Your Options for Alternative Financing
While you may not like the interest rates that come with most alternative loans, you might like the number of options you have for securing financing. Such options include assets, medical practice loans, export loans and business lines of credit. To help determine which specific option is right for your business, be sure to get in touch with a knowledgeable and trustworthy lender.
Alternative lending could be just the just the option you’ve been looking for if you’re tired of being denied a traditional loan. Explore the alternative path to establishing and sustaining your business.
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