Alternative Loans: What Exactly Are They?

With banks increasingly tightening their lending criteria when it comes to small business loans, business owners can often find themselves in a very difficult position. Whether you are just starting out in business or you require a cash injection to take your business to the next level, being turned down by the big lenders can be a frustrating experience. According to recent studies, a staggering 82-percent of small businesses fail due to problems with cash flow.

However, there is another way to obtain funding, and that is in the form of alternative loans. Many business owners are turning to alternative funding sources having been turned down by traditional lenders. As a result, the alternative loan industry is starting to gain much momentum, resulting in more products and better deals for small business owners.

The Benefits of Alternative Loans

Alternative financing is designed to help business owners obtain the working capital they need as easily and as quickly as possible. If you know about merchant cash advances, then you already know about alternative financing. This type of lending is one of the easiest and best ways to obtain funding for your business. In fact, you could receive the money you need within just a few days following approval. With many approvals being processed on the same day, it is easy to see why business loans of this type are much more tempting than a traditional bank loan.

Other benefits of alternative loans include:

• More relaxed criteria - While banks often insist on a credit score of 700 or more, alternative lenders are much more lenient and will often approve on credit scores that are 500 and over.
• Online applications - When you need to replenish inventory quickly or have a big order to fulfill, you need to get your hands on funding fast. Online applications and same day approvals are all within your grasp when you apply for an alternative loan.
• Less complexity - Banks often request that you put up collateral as a guarantee against your loan. Most alternative lenders won't ask you for any personal guarantees, proof of earnings or details of your operating history.

A Much-Needed Lifeline For Small Businesses Everywhere

It is true that some alternative loans may be more expensive than traditional bank loans. However, when you need money fast that will help you to meet objectives and drive your business forward, an alternative loan is often the best solution. Sustainability is key, and even businesses that have been established for decades will turn to a small business loan to help them expand further and manage cash flow effectively.

Final Thoughts

Every business reaches a point where it needs to consider additional funding. Whether you're expanding and need to move to new premises or you're launching a new product, more working capital can get you where you need to be. Alternative loans can help you to do this in the quickest and most convenient way and without the jargon, time delays and strict credit requirements.

If you are considering applying for short-term capital to fund your business, we can help. Original Funding will help you to find the right product to suit your business needs and strategic goals. Speak to our experts today to find the right alternative loan for your business.