If you are an entrepreneur or business owner looking to grow, you know that in many cases, you have to front an initial investment before seeing an increase in profits. Sinking your existing capital into new endeavors is risky, so you may be researching what options are available for loans. Many banks and credit unions advertise that they have attractive lending programs. Some would assume, in fact, that these are the only options available for lending. In actuality, there are a plethora of other choices to explore. Alternative lending can provide you with the funds and flexibility you need to take your business to new heights.
A bank is the first stop most loan seekers make when searching for funds. They are the most visible and popular providers, so it makes sense to start there. A bank loan, of course, will come with benefits and downsides. Banks will typically offer a variety of options for loans, and if you are an existing customer, they may prioritize your application. The fraction of applicants who receive funding compared to the number who apply, however, shows that very few businesses are actually approved for bank financing. Those who are approved are typically stuck repaying their loans with inflated interest rates.

Alternative lending offers the opportunity to secure funds from outside of the conventional bank loan structure. As awareness has increased regarding some of the biggest banks’ unsavory dealings, more and more lenders have sought out options from other providers. Some of the most common alternative loans are accounts receivable financing, merchant cash advance and asset based lending. All of these programs entail approval on bases other than, or in addition to, credit score or liquid capital. This means that you can bypass the endless delays, committee consultations and credit reports that banks will make you wait for in order to make a decision on your loan application.

Each business or entrepreneur is different, but for many, alternative lending is a more feasible and accessible option for funding. The terms, application process, interest rates and options all tend to provide more flexibility than traditional bank loans can offer. If you are interested in securing an alternatively funded loan, you should research different types and determine which is best suited to your long-term goals. You should also research lenders to get an impression of which lenders are the most reliable and easy to work with. It’s up to you whether you apply for a bank loan or an alternative loan, but you should consider all options carefully before deciding.