It is challenging to predict any industry’s future financial climate, it constantly changes and seeing even a few months into the future can be difficult. For SBO’s (small business owners), keeping up with new trends is expensive, more often than not, they don’t have the funds to adapt to the current climate. Borrowing money from traditional money lenders takes time, that’s why several SBO’s are now looking for alternatives.
What is Alternative Financing?
Alternative financing is basically money lending institutes which offer small businesses the chance to borrow money without jumping through all the traditional hoops. They are an alternative to conventional organisations such as banks and credit unions. A lot of SBO’s avoid asking banks for money because they believe their request will be rejected, seeing it as a waste of time and money. If you’re a business owner who has had some issues in the past with loan repayments or other closures, you’ll find it very difficult to secure an advance of cash from any traditional banking institute, alternative financing organisations offer you additional options.
Benefits of Securing an Alternative Loan
- More Flexible, Less Rigid
Alternative financing is easier to get because it is less stringent that other methods, a lot more business owners can apply in comparison to requesting funds at a traditional money lending institute. If your company is based in South East London, and you require loans for a small business in Surrey, but you’re struggling to secure them with your local bank, why not try an online money lender? They won’t just hand you the cash without any checks, but they’ll take a lot more factors into consideration when processing your request. In general, you must be operating for at least 12 months, the company should have a monthly income exceeding £3,000, and the company must be in your name. Although terms and conditions will differ, most UK based money lenders will look for these 3 factors.
- Variety of Options
Traditional banks and other money lending institutes will only entertain you if you are requesting substantial sums of money, anything less than a large number is usually rejected. So, if you’re a small business owner looking for support and a small amount of cash, there isn’t much point in approaching these organisations.
Alternative money lenders offer a wide variety of options, all are designed to help small business owners in a time of need, most businesses will allow you to borrow up to 100% of your monthly turnover.
- Rapid Response Time
Conventional money lenders take time to process requests, applications can take forever, this is frustrating when you need funds immediately. In contrast, online money lenders can approve your loan request in a matter of hours.
It is becoming increasingly difficult to secure a loan using traditional methods, banks and credit unions are tightening their belts, making it hard for small business owners to successfully borrow money. Online money lenders are a breath of fresh air when it comes to securing small amounts of cash, they’re less stringent and more sympathetic towards SBO’s.