Sometimes a traditional bank is not the best place to get a business loan. That’s especially true if you have a lower credit score, have been in business two years or less, and/or are looking for a smaller loan of less than $250k.
What’s Wrong with Major Banks when You Need a Business Loan?
Unfortunately, typical major banks are too rigid in their lending requirements and don’t see the upside in lending to the small business community. High administrative costs also stand in the way of traditional banks loaning funds to startups and business owners. Since the banks are failing to meet the needs of many entrepreneurs these days, there are many alternative lenders ready to offer you financial options for business funding.
Why Explore Alternative Lending?
For small business owners (SBOs) or entrepreneurs running a startup, alternative lending offers many benefits, including:
- More flexible qualifications: Getting approved by an alternative financial institution is simpler for a borrower because these lenders don’t have strict, inflexible rules (like a specific credit score or minimum years in business) to qualify for a business loan. These lenders look at your whole financial picture to determine if making a loan to your business is a good risk.
- Multiple financing options: Alternative lending groups offer different types of loans, equipment leases and more, specifically designed to fit the needs of small business owners.
- Better loan repayment terms: Due to competition, you can typically get a better deal, with lower interest rates, if you get your loan through an alternative financial firm. You may find it refreshing to deal with financial experts who offer products tailored to the needs of entrepreneurs.
- Quick approvals: Alternative, non-bank lenders use a more personalized approach when approving loans. They can look beyond the standard measures of creditworthiness, and they have fewer layers of bureaucracy than the average bank. This helps them make decisions quickly, often approving and funding loans in a few days, so you can get on with your business.
Ready to learn more about alternative lending? To find out how an alternative lender might help your business, contact Commercial Capital Partners today.