Alternative lending, or non-bank lending, makes new business models possible for ambitious entrepreneurs. Alternative lenders can help startups, small businesses and niche markets succeed by understanding how their needs differ from big-name brands served by big, traditional banks.
Alternative Lenders: Who Are They?
Generally, these lenders are online-based companies, using streamlined processes and unique underwriting methods. Without the overhead and strict lending practices of banks and credit unions, these alternative lenders can serve smaller businesses that big-name banks consider too risky. Alternative lending products offered include invoice factoring, equipment financing, business lines of credit, term loans, and other funding options.
Alternative Lending Advantages
Alternative lending products may carry higher interest rates, but offer many benefits including:
Quick, simple online application process: You’ll typically submit much less documentation to qualify for alternative funding.
Fast approval decisions: These financial companies are typically private firms, without all the layers of management found at traditional banks, so applications can be quickly processed.
Friendly underwriting standards: At non-bank lending companies, you don’t necessarily need to be in business for many years or have a stellar credit score to get funding for your business. In some cases, the credibility of your customers and the size of their orders are evaluated, rather than your credit history.
Unique lending products: Non-bank lenders offer funding options that can allow you to get an advance on your outstanding invoices, maintain a business line of credit, finance heavy equipment, buy fix-and-flip investment properties with short-term loans, and much more.
When Big Bank Requirements Get in Your Way, Turn to Alternative Lending
Big banks exist to serve customers their way and that can work well for established companies. For new startups and innovative or seasonal businesses, alternative lending can often help them achieve their goals, with quicker, simpler applications and innovative funding products.
Learn more about your alternative lending options by contacting First Source Capital today.