Why You Should Consider Alternative Lending

Traditional loans are a great source of working capital, but they don’t work for everyone. If you’re a startup, have bad credit history or otherwise can’t meet the strict approval requirements for traditional lending, you may not know where else to turn.

Fortunately, there are many alternative lending options out there. In fact, you may find financing that offers more benefits than a traditional loan ever could.

More Opportunities for Approval

First of all, many alternative lenders offer financing that doesn’t require close examination of your credit history. For example, when you apply for a stated income commercial real estate loan, lenders are more interested in the value of the property. There are also funding opportunities that don’t require monthly payments.

Unsecured Financing Options

If you don’t want to put assets at risk, you can seek out unsecured loans instead. Many third party lenders can provide unsecured business lines of credit, which allow you to make draws on the principal without pledging collateral. While this particular type of loan tends to have higher interest rates, there are also options that charge a fee instead of interest, potentially saving you money.

Quick Approvals

Alternative lending is a great choice for businesses because the application process is very quick. In some cases, you can even get cash in 24 hours. When you’re trying to take advantage of a business opportunity, time is of the essential. Additionally, this quick approval can give you the upper hand in negotiations.

Less Paperwork

One of the reasons the application process is so quick is because there’s less paperwork. That means less hassle for you and less work for underwriters. In some cases, all you need to show is proof that an asset can cover the loan principal and any fees.

Short-Term Loan Options

Sometimes you just need a loan to bridge the gap between investment and profit. Alternative lending can offer the perfect solution with hard money and bridge loans. This type of financing generally lasts 2 years, allowing you to access the funds you need without getting stuck in a 30-year mortgage.

Unique Financial Products

Some industries have unique business models that can make it difficult to qualify for traditional loans. To serve these customers, third party lenders offer a variety of unique financial products, such as factoring, accounts receivable financing, merchant cash advances and purchase order financing. Each of these takes into account your business’s challenges and goals.