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Small Business Financing Options without a Traditional Bank

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Small Business Financing Options

Running a business is a challenging undertaking that requires you to invest a large amount of money. Most small business owners may not have enough money to keep their company running and may need a loan. Getting a loan ensures that the business keeps running and growing. You can get alternative debt solutions from a private lender in your area by checking out non-bank directories.

Lender directories have lists of private lenders who can help you find the loan that you need. These lenders post different loans that you need for your business. Bear in mind that private lenders have fewer qualification requirements and allow you to borrow small amounts of money.

The Most Popular Small Business Loans

Here are the most popular alternative loans:

Invoice Factoring

Invoice factoring involves selling your pending accounts receivables to a lender at a discount. The lender will give you about 90%, and then the 10% discount will be the profit they make after collecting the payments.

Equipment Loans

These are loans you get to buy equipment to use in your business. They are different from other loans because it is specific about its use. Equipment loans use the equipment as collateral, and you do not have to provide any other type of collateral for your loan.

Business Line of Credit

The business line of credit loans works like a credit card, and you withdraw and repay the funds you need within your credit limit. It is an excellent choice if you need to buy inventory or manage your cash flow. These loans have a limit of between 1000 and 250,000 dollars, are unsecured, and flexible. With a business line of credit, you can use and repay your credit when you need to.

Merchant Cash Advance

Merchant cash advances are available to business owners, and the limit is determined by their credit card sales in the merchant account. These loans are usually deposited into your account within 24hours. They are great for establishments like restaurants and retail outlets that rely on debit and credit card sales. That said, they are also available to other types of businesses.

The Main Reason Small Businesses Take an Alternative Loan

Requirements to qualify for a business loan have become challenging for businesses to fulfill, and they often turn to alternative financing. One of the main reasons small businesses seek out alternative funding is when traditional loans are denied.

A bank may deny your loan application because you do not have a satisfactory credit score or need a small loan. For instance, if you only need 20,000 dollars to cover a deficiency in your working capital, traditional banks will not approve your loan.

The Benefits of Alternative Debt

Here are the benefits of getting an alternative loan.

Fast Application Process

Banks take a long time to review your application and approve it. With alternative funding, the application process takes a short time, and you can get your loan approved within a day.

Access to Unsecured Loans

A bank loan should be secured using a personal asset or business assets. That is not always the case when you apply for private finance. You can get unsecured cash advances and working capital financing for your business from alternative lenders.

Approval for Bad Credit

Credit scores can be a significant concern for you when borrowing from banks. Alternative sources like payday loans will consider many other issues when approving your loan application. That means you can get a loan even if you have a low credit score.

How To Find Alternative Debt Solutions

Make sure that you know your credit score and your revenue before you apply for a loan. That way, you can find a loan and get approval for it. One of the best ways to find alternative debt solutions is to use lender directories and comparison sites like ADS.finance. You will get a list of options, and you can choose one that works with business credit score and revenue.

Alternative business loans are an excellent way to keep your business running. If you do not know where to find the right private lender, you can check out ADS.finance, a lender directory with over thousand brokers and non-bank lenders willing to help small businesses.

 

We are a team of writers passionate about innovation and entrepreneur lifestyle. We are devoted to providing you the best insight into innovation trends and startups.

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