The Top Non-Bank Small Business Loans

Entrepreneurs these days are seeking alternative ways to fund or sustain their business ventures. This isn’t limited to smaller entities, either. Many Fortune 500 companies are jumping on the non-bank funding bandwagon, because they, too, need a quick source of cash for a business need. Even they can see that big business and small business loans are not limited to traditional financial institutions and here are the top non-bank financing options.

The Small Business Administration

The SBA was created in 1953 to give those looking to open a small business a resource they can turn to that helps to ensure their success. Alongside guidance, the SBA offers small business loans to those who qualify. The loan types include:

  • General
  • Micro
  • Equipment and real estate
  • Disaster

The loan approval process through the SBA is much the same as a bank, but more forgiving. You will submit an application alongside your business plan and financials, but the lenders that work directly with the SBA tend to excuse poor credit or other setbacks more than traditional financers. They will also offer longer payback terms and lower interest rates.

Other Government Loans

If the SBA doesn’t work out for you, there are other government agencies—federal, state, and local—that are willing to offer loan programs for small businesses. These programs are especially helpful to those who are a minority-owned business, including a disabled, veteran, or woman-owned company. Check government funding programs at all levels, and you’ll likely find small business loans under which you might qualify.

Alternative Lenders

If you do not qualify for a loan through any of the SBA or government-sponsored programs, you can always approach alternative lenders for your financing needs. Some examples of alternative loans include merchant cash advances and peer-to-peer financing. A merchant cash advance works much like a payday loan, only in this case the lender is giving you cash in return for a percentage of your future debit and credit card sales. Peer-to-peer loans are those in your business demographic who are willing to lend you money under the guise of a payback schedule and interest. Both options work well for those who do not qualify for traditional financing.

These are the top non-bank options, but small business loans are not limited to outside sources. Many entrepreneurs also seek funding from their inner circle or turn to their own personal assets for financing. If you have family and friends willing to support your venture, or you have the liquid assets that you can convert to immediate cash, this funding alternative will also support your small business cash needs.