Every business needs funding at some point. Although you might have had other personal sources of finance as you were starting the business, there comes a time when you need more cash to sustain the existence and the growth of the company. Luckily, there are many lending options that you can rely on, especially if you run a small business. So, if you cannot secure a loan through the traditional banks, here are the available alternative solutions that can help you.
Crowdfunding alternative lending platforms allow different borrowers to raise small amounts of money. Crowdfunding uses social media platforms and other networks that connect like-minded people. When many willing business people contribute their finances into the same pool, they create a large amount of capital, which they can then lend to the members who need immediate cash. Crowdfunding platforms have less stringent loan application rules, and anyone can access the loan provided that they adhere to the crowdfunding rules.
Online Business Loans
Advancement in technology and social media platforms has made it easier to access alternative lending firms online. Many online lenders offer lesser qualification requirements for small business loans as compared to conventional banking institutions. The online lenders may not necessarily ask for collaterals, although they may need decent business credit to get the approval. On average, your business should have been in operation for more than two years to get online loans. The requirements, however, vary from one online lender to the other, and you might, therefore, need to research the best before you apply.
An invoice financing lending option is available to businesses that get payments once they deliver their goods to the clients. Commonly known as the account receivables financing, invoice financing offers funds against the loan which the firms owe its customers. Basically, the customers’ invoices become the collateral for the loan. The credit requirements are less strict, although some things such as bankruptcy, significant liens, and other past credit issues may hinder yours from assessing the credit. The loan processing period takes a maximum period of three business days.
You might have experienced various challenges to secure bank loans if you run a small business with little or no collateral. You should, however, not worry as there are many other reliable lending options available. Research on the above sources of business funds and select the most suitable for your business. If you do not rush the application process, you will get the best financing option for your business.