The world of small business financing is ever changing. Today, there are more options to small business owners than ever before. Nearly one-half to two-thirds of small businesses will seek financing from non-bank sources at some point in their business careers.
Small businesses continue to face challenges finding traditional financing, which has created a need for alternative lending institutions. Many alternative lenders offer a wide variety of financing options that are not offered by traditional institutions. This includes business cash advances, working capital loans, business lines of credit, SBA bridge loans, short term business capital loans, factoring for business, bad credit business loans, unsecured business loans, Veteran business loans and much more.
Untraditional lenders offer quick access to capital, without the traditional paperwork that lenders require, which can take months to process with underwriters. Fast financing offers businesses the ability to quickly pay debts, purchase seasonal merchandise, purchase second locations and grow their profitability.
Most small businesses do not have access to cash reserves, which is why alternative lending sources provide the necessary access to funding that allows them to make decisions quickly and effectively, helping to successfully grow their businesses.
Alternative lenders offer businesses the following benefits:
- They can purchase discounted raw materials, inventory or new equipment at discounted prices. This is ideal for restaurants, holiday sales or construction companies looking to take advantage of wholesale equipment auctions.
- Some businesses face buying out partners, which means purchasing a substantial portion of the business and profits.
- Expanding to new locations and purchasing additional equipment, merchandise and hiring new employees, etc.
Small businesses also experience many unexpected challenges that can be costly.
- Fluctuations in today’s economy can easily influence businesses’ bottom line profits.
- Harsh weather, such as what the East coast experienced this past year, can close businesses for days, if not weeks.
- Unexpected experiences can put pressure on cash flow, requiring working capital. This can include failure of restaurant equipment, construction equipment, computers, agriculture equipment and much more.
When determining what type of financing makes sense for businesses, it is best to speak to an experienced alternative lender that can explain the risk and losses associated with client default. As mentioned above, there are many different types of alternative loans available in today’s market.