Small Businesses Choose Alternative Lenders Over Banks

alternative lenders

By Kimberly Teschemacher, Public Relations Director

Traditionally, when a small business needs to borrow money, they will go to the bank, fill out the appropriate paperwork, and wait 8-10 weeks for approval. But what if 8-10 weeks is too long? What if you need have an emergency business loan situation? What if you don’t have the collateral to get a business bank loan? If you find yourself asking these questions, alternative lenders might be the way to go.

Lately, small businesses with sales over one million dollars choose to stray away from big bankers and explore alternative lenders instead. Alternative lenders have several advantages over banks, which can better suit the small business’ needs when it comes to providing working capital.  Alternative lenders provide a quick answer which give the business owner the ability to buy time to either right the ship, apply for a bank fund or line up other long term financing- like through a factor.

Waiting 8-10 weeks for a bank fund can be tedious, not to mention nerve- racking. You are waiting all this time for a bank fund that you may not even be qualified to receive. When small businesses need funding, there is no time to wait around.  Maybe a large client check intended to fund payroll hasn’t come in yet, and you need funding now. Or maybe your business landed a huge project and you need money to fund it upfront until the project pays itself off. Or maybe you are in the middle of a minor road bump in your business and need short term help to overcome it. Whatever the case may be, small businesses typically need the money now, and don’t have time to wait around. That is why successful small businesses have preferred alternate lenders prompt feedback and quick turn-around as critical to why they went with the private money in the first place.  Also noted is that Alternate lenders require minimal paperwork, and can provide reliable small businesses the money in their account on the same day.

Let’s say you have a big project coming up, and need a short term business loan to initially fund it. You know that within the next month or so, the net profit of this project’s success will pay off the extra needed working capital. You only need short term funding to help you through this period. Is a bank your best option in this situation? The answer is no. Bank funds have a yearly administrative fee and often need your books audited or reviewed by a CPA, which can become extremely expensive. If you are confident that you can pay off the money quickly, then alternate lenders are for you. With alternate lenders, you have flexibility to repay the lent money. In fact, you can pay back the funding in as little as 7 days’ notice with zero penalties with alternate lenders such as Financing Solutions (www.payrollfinancingsolutions.com). Their flexible nature enables you to become independent again once the cash flow increases again.

Assuming the small business has enough assets for bank fund approval, another way successful small businesses use alternate lenders is to receive  quick no-bank business funding while waiting those 8-10 weeks for bank approval. The short term funding does not affect credit score, and this relationship provides you with money until you can set up a bank line of credit. How’s that for an easy transition?

Sure, you can wait around for 8-10 weeks to hear if you are qualified for a bank fund from a traditional bank. Or, you can follow the trend of successful small businesses and have the money in your account almost immediately by choosing alternate lenders.

Financing Solutions (www.payrollfinancingsolutions.com) provides fast business funding of $5,000-$100,000 to good small businesses with sales of $500,000-$7 million that can be used for working capital or to make payroll.

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