As a small business owner, you know that securing financing is crucial for growth and survival. However, the traditional routes, such as bank loans, aren’t always the best fit for every business. Whether it’s the long approval processes or strict eligibility criteria, alternative lending might be the more flexible and accessible solution for your business.
In this blog, we explore the benefits of alternative lending for SMEs and why it could be the right choice for your business.
Alternative lending refers to any form of finance that is outside of traditional bank loans. This includes options such as peer-to-peer lending, crowdfunding, invoice finance, merchant cash advances, and more. These types of lending can often be faster, more flexible, and easier to access than traditional loans.
One of the main reasons businesses turn to alternative lending is the speed at which they can access funds. Traditional bank loans can take weeks or even months to process. On the other hand, alternative lenders often offer quick decisions, and you could have the money in your account within days.
Many alternative lenders offer more flexible repayment terms than traditional banks. For example, with invoice finance, repayments are tied to the sales cycle, meaning repayments are based on your business’s cash flow. This can make managing your finances much easier.
Unlike traditional lenders, alternative lenders are often more flexible when it comes to eligibility. They tend to focus more on the health and potential of your business rather than just your credit score. This makes it easier for businesses with less-than-perfect credit to secure financing.
Alternative lending comes with a variety of different products designed to suit different business needs. Whether you’re looking for short-term working capital or long-term investment, there’s likely an alternative finance option for your specific requirement. Common alternatives include invoice factoring, merchant cash advances, peer-to-peer lending, and crowdfunding.
If you’ve just started your business and are having trouble securing financing from traditional banks, alternative lending could provide the access you need. Many alternative lenders specialise in working with startups or small businesses with limited trading histories.
Alternative lending can be a game-changer for businesses that don’t fit the typical mold for bank loans. It can be particularly helpful for businesses in industries that are underserved by traditional banks, or for those with irregular cash flow or credit challenges.
If you’re considering alternative lending for your business, it's important to assess the pros and cons and ensure you choose the right product for your needs.
Apply now for funding or contact our team to find out more.
As a founder of multiple businesses, Jamie believes that mindset, discipline and ambition are key drivers for success, both for his businesses and for his clients.
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