It has been estimated that between 50% and 67% of all small businesses will need business loans at least once during their operating lifetimes, and most businesses actually require several loans during that time. In many cases, working with traditional lenders like banks and credit unions simply won’t work for a small business, because the approval rates are typically low with those institutions. It’s also true that even if you are approved, it will generally take between one and two months before you actually have money in hand. Fortunately, alternative lenders can fill in the gap and provide much of the funding needed by small businesses.
How alternative lending helps
Many new businesses simply don’t have the cash reserves or the good credit history to be eligible for a loan that might be sorely needed. This is when alternative lenders can really fill the void left by all those bank disapprovals. In many cases, banks won’t even lend amounts of less than $200,000 to businesses, because they can’t make enough profit on them. Again, alternative lenders can fill this gap and provide needed funding to small business owners who qualify.
Alternative lenders are not under the same constraints that banks are, and can be much more agile in lending than all the machinery involved in a bank loan. When you need money quickly to take advantage of a sudden business opportunity, you might be able to secure the necessary funding in a matter of days with an alternative lender, as opposed to the weeks or months it would take in a bank loan. You might have to pay a higher interest rate, but that’s because the alternative lender is exposed to the possibility of you defaulting on the loan, and they have to protect themselves.
Looking to work with an alternative lender?
You can often be approved for a loan more readily by an alternative lender than you would be with a bank, because alternative lenders are not subject to the same kinds of restrictions that banks are. If you’re ready to work with an alternative lender, contact us at My Commercial Capital, so our financial specialists can help you secure the funding you need.