Business growth requires capital, but finding funding can be a challenge. Thankfully, you do not have to rely on bank loans or stress about being automatically denied for a loan. Alternative lenders have many advantages over traditional bank financing, including these three reasons:
1. Less Likely to be Denied
Historically, banks have shied away from small business owners and entrepreneurs. This tendency to deny loans only increased after the 2008 depression, leaving many business owners without a way to gain extra capital necessary for growth and expansion. Small businesses often find themselves in a catch-22, where the company must spend money in order to make money, but are denied a loan by the bank due to lack of collateral. Many alternative lenders will work around this paradox to help you get the funding you need to grow.
2. Niche Markets Better Understood
Local, small business lenders understand how it feels to be denied a loan. They also understand the unique financial challenges that many entrepreneurs face, from lack of equipment to late customer payments. Whether you need to update your facilities or invest in a specialized piece of equipment, a local lender can help assess your financial standing and perceived growth based on your company’s individualized qualities.
3. Credit Scores Not the Only Factor
Most banks look at credit scores first, which means your company may be denied immediately. Alternative lenders are much more likely than banks to review your loan request on a variety of factors, not just your credit score. In addition, there are many options for alternative funding, so it should be easier to find the right loan option for your company. Contact us today to discuss your business lending options.