More and larger banks focus on large customers, so they often ignore small businesses. What should the small businesses do, and how will they get the financing they need? Well, it is where alternative business financing come to your help.
Alternative business lenders are filling the gap created by large bank lenders. It means that you have more alternative business loan options available to you from non-bank lenders. Now let’s look at some financing options.
Alternative Business Loan Options
Alternative business loan options refer to financing options beyond traditional bank loans. These loan options are designed to cater to the financing needs of small business owners who may not meet the requirements of traditional loans, whether due to insufficient collateral or less-than-perfect credit. Some alternative loan options include business lines of credit, invoice financing, merchant cash advances, peer-to-peer lending, and equipment financing.
Each of these options has its unique terms, requirements, and benefits. By exploring alternative business loan options, small business owners can find the financing that best suits their needs and helps them achieve their business goals. Researching and comparing different options before choosing one is essential to ensure that the loan meets the business's financial needs and capabilities.
1. Business Loans
The loan amount of these loans varies from $10,000 to $500,000. The sanctioned loan amount depends primarily on monthly gross sales and not on the profit or loss your business might make. You get the approval within the day.
The term maybe 36 months, and repayment is easy from the business bank account. You can get a business loan with a simple page application, and you must provide business bank statements for review. Almost all the credit types range from the excellent to the poor. But you can get a business loan if you are not a start-up business.
Source: Fitsmallbusiness
2. Lines of Credit
You can also secure flexible business lines of credit up to $100,000 as alternative business financing. With a repayment term over 12 months, you can get flexible credit when needed. Getting one may require you to provide your business bank statements for review, and you do not need an excellent credit rating to get one. Whenever you need credit, you can get the ready cash to pay back easily within one year.
The lines of credit work in the same way as the credit card: you take the amount you need and pay back with what to use. It was a challenge to get one approved from traditional banks earlier, but alternative business funding sources have made it easy and quick to make an online application.
3. Invoice Factoring
It is an excellent option with slow cash flow and late-paying customers. In invoice financing, lenders will advance you an amount ranging from 50 to 90 percent of the outstanding invoice amount. Once the customer pays for the pending invoice, you will get the remaining percent of the pending amount, leaving the fee owed to the lender.
3. Equipment Loans
Are you planning to finance new equipment for your business? You can get equipment financing from alternative business lenders. The lender can finance the 100% value of the equipment that you plan to purchase. The equipment serves as the loan collateral, and you repay the loan as you would a term loan.
4. Merchant Cash Advance
Merchant cash advance is an easy and straightforward financing option with which you can raise cash by selling a portion of future sales at a discount. You can get advance cash ranging from $10,000 to $500,000. These advances do not come with a term limit, and you can repay a percentage of future sales. To get an advance, you must provide the business bank statements showing consistent cash flow. However, you will not have to provide tax return statements.
Closing Thoughts
Thus you can get the financing for your small business from an alternative business lender like AdvancePoint Capital. Here is what you need to do:
- Make an application
- Submit the documents
- Wait for approval
- Get funds within 3-4 hours in the business bank account.
