If your business is running on tight finances and you're looking for a loan to keep things running smoothly, the last thing you want to do is jump on the first loan you find. The bank might offer low-interest rates but that doesn't mean it's the best option for your business' current and future situations.
There are a few different ways to borrow money for your business but often underwriting takes a while. Not to mention you might not get approved for the amount you need.
Ease your headaches with an alternative business loan. They're quick and easy to process and you'll get your money when you need it. These types of loans are built with small businesses in mind and that makes them easier to obtain, too.
In this article, we're discussing 5 ways alternative business loans can help your small business. Keep reading to learn more.
No Collateral Required
As a small business, the last thing you want to do is gather up all your assets as collateral just to get cash flowing again. Traditional bank loans often require collateral which can be risky for your business, and even for you as an individual business owner.
With an alternative business loan, your business can keep running at full speed without risking assets. That's right, no collateral required.
You might think that without collateral, you can't afford the interest rates, but we'll get to that in a minute. Besides, other lenders may not give you the value of your assets anyway.
Don't tie your assets up in loan values with long terms and high interest rates. Get an alternative business loan, instead. Keep your assets on reserve for overhead values and quit worrying about the banks.
Less Paperwork
The approval process for these types of loans is relatively quick and generally, there are only a few questions to answer. You can focus your energy on running your business instead of looking for paperwork that might not exist.
Plan on being done with the application process in less than an hour instead of possibly a few weeks spent searching for the right documents. Even online lenders take you through a 24-48 hour application process alone.
Make it easier for yourself and for your business and quit worrying about paperwork. You don't have to because there is none!
Faster Funding
With any other conventional loan, you're likely to wait weeks if not months for an approval. Underwriting processes take time and there's a lot of paperwork involved. And then you still have to wait for the funding.
An alternative business loan can be approved in as little as a couple of hours and you'll receive funding the next day. Some loans disburse funds the same day.
Get your money, fast, and put it to work right away instead of waiting for weeks or months to get your business back on track. With faster funding, you can get cash flow moving again or make payroll on time.
Faster funding comes in particularly helpful at times of growth or expansion. You can use the funds to hire additional staff and perform advertising efforts. Not to mention help pay for the expansion itself while keeping your business running steady.
Shorter Terms
An alternative business loan generally has a term life of 1 week to 9 months in comparison to an SBA (Small Business Administration) loan that carries terms of 5-25 years. Bank loans base your terms on a credit check.
You can also enjoy interest rates as low as 5.9% on those shorter terms up to $150,000.
With shorter terms, your business will be better able to allocate the funds from the loan responsibly so that cash flow improves. It will help your business succeed financially so that you can focus on other important issues. After all, nobody wants to spend all their time managing debt.
The great part about shorter terms involves the payback process. You can pay the loan off right away without penalties, or set up a payment plan that works with your cash flow and overhead.
Faster Payback
The longer terms traditional banks offer means it takes longer to pay off the debt. This also means you're paying more in interest over the life of the loan.
No business really wants to have a loan on their books, especially for an extended period of time. That's why an alternative business loan works.
First of all, there's no prepayment penalty on this type of loan so you don't have to worry if you want to pay it off early. There's an additional savings right there!
Second, the repayment plan works with your finances, drawing payments daily instead of one lump monthly sum. This allows you to pay the loan off faster and keep your daily operations up to speed at the same time.
Take Advantage of Alternative Business Loans
If you have less than stellar credit and your business is in a bind, this type of loan could work for you.
These types of loans are designed for small businesses that need money right away. There's no credit check and, in some cases, you can get an approval within 24 hours. Even better, there are no restrictions on how you can use the funds from your loan.
When comparing alternative business loans to traditional or conventional loans, it's easy to see that the latter is more expensive and not as beneficial overall.
If your business is experiencing a cash flow issue, or if you have questions, contact us! It's simple to qualify!
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