How to tell if Alternative Financing is right for you
Loans are hard to secure, especially for a new business, or an established business with an inconsistent stream of revenue. However, banks are not the only sources of business financing, and you can benefit from alternative financing solutions.
Alternative financing for small businesses is available outside the traditional banking sector and offers quick access to capital to cater to the needs of small businesses.
Here is a checklist before considering alternative financing for your business:
Your net income is below five million US dollars per year
Institutional lenders prefer working with large businesses, which can borrow enormous amounts of money and secure them with high-value assets as collateral. Businesses with a low annual income are riskier for banks and pay minimal returns on interest. Therefore, you are unlikely to get funding from a bank if your annual revenue is below five million US dollars.
In need of urgent funding
In today’s competitive business environment a small business cannot afford to wait for weeks or months for loan approval. If you are in need of urgent funding to grow and sustain your business, alternative lenders are the right choice. They respond fast by use of machine-learning technology to process loans within a within minutes.
For a small or new business, it is crucial to work with a lender with flexible loan terms. Unlike banks, alternative lenders can offer you a customized loan with a personalized repayment period and interest rate depending on the financial status of your business.
You prefer digital processing.
While traditional lenders require some form of paperwork for loan applications, alternative lenders use digital platforms to serve their customers. Thus, you can apply online and link your account with lend to enterprise software such as QuickBooks for the efficient management and repayment of the loan.
If you are interested in alternative financing, we can help you in choosing the right option. Contact ASA Capital Funding for more information.