Small businesses need funding to help them cover costs associated with their business operations. Traditionally, business owners turn to banks and other financial institutions for such kind of funding. However, before the business obtains financing from conventional lending institutions, there are conditions. They have to prove the ability to repay the loan and have a high credit score. As a result, not all the business qualifies to get the business financing from these conventional institutions.
Although business owners prefer getting credit from conventional lenders, they do not qualify for them. When they are denied loans from traditional lenders, they have to look for other alternatives. Since business owners need the money to grow their businesses, they have to seek help from all corners. That is why they turn to seeking alternative business funding for their businesses.
Alternative business lending is a loan other than traditional funding from conventional institutions. In other words, it is the kind of loans businesses borrow from non-bank, private, and institutional business lenders. It is the only alternative they have after the banks decline their loan applications. That is because they need business capital to both sustain and grow the businesses. There are several benefits associated with alternative loans for businesses as stated below.
- You can Borrow without Collateral
When you borrow from traditional funding institutions like banks, you have to show proof of collateral. The banks will need that before they can approve the loan. The best thing with the alternative lenders is that, you can still have an alternative debt without collateral. Most small business owners may not have the kind of collateral the lending institutions want. That is why it is not easy to obtain funds from these institutions to support your small business. But they can seek help from other lenders if the conventional lenders are not offering the kind of financing they need.
- Shorter Repayment Periods
Sometimes the business owners need alternative loans for a short time to help them get out of a pinch or make use of a business opportunity. ADS.finance understands the importance of taking business opportunities when they come. They offer business owners a chance to borrow money using the available borrowing platform. The platform connects borrowers with hundred of alternative lenders. The lenders will offer them alternative debt solutions for short-term business needs. Then the businesses will be able to clear their alternative debt after making the best use of the business opportunity.
- No Perfect Credit
One of the main reasons banks and other traditional lending institutions do not approve loans for small businesses are low credit. But the best thing with alternative business loans is that the lenders do not base their lending on the credit score. That means even when the credit history of the business or the owner is low; the alternative lenders can still provide business financing. All the lenders want is to be sure the business can pay the loan and approve the funding.
- Shorter Approval and Processing Period
Another good thing with alternative borrowing is that there is no massive paperwork to complete before obtaining the loan. Your alternative business loan application is a concise form that you can complete in no time. Most of the lenders are available online, and you have only a short application form to submit. At the same time, you need a short time to know your application’s fate, unlike when the banks need to approve your loan. You do not have to wait for long before your loan is approved and the money is availed to you.
- High Approval Rate
As much as the business owners are looking for lenders, the alternative business lenders are also looking for businesses to fund. Therefore the approval rate for loans is very high as compared to the traditional lenders. Companies have stringent rules and conditions to fulfill when seeking funding from banks. On the other hand, there are fewer conditions when it comes to alternative business borrowing. That is why the approval rate is very high.
If you are a business owner looking for financing, alternative loans could be the best option. ADS.finance will connect you with the right alternative lender. The platform connects borrowers with the right alternative financing company or individual for business loans.