3 Outstanding Options for Alternative Lending
Many business owners have this theory that you have to walk into a bank to be able to get a loan when really alternative lending options are just a few keystrokes away on your own personal computer.
So, who do these “alternative” loans suit the best?
Various loans may work well for a variety of different business with various needs. It may also suit your own business. This is especially useful for businesses who must consider where they can go to get a loan when they don’t qualify for one from a traditional bank.
Where Else Can I Go for a Loan?
When you don’t qualify for traditional bank loans there are a variety of other alternatives available for an individual to choose from. Many options that will step up to the plate to fill this void are online-based institutions that offer loans based on an entirely different set of criteria from those of traditional brick-and-mortar banks. This means that your business may easily qualify for a loan from one of these online-based institutions even if you don’t qualify for a loan from an average brick-and-mortar bank.
Four of these types of loans that you may qualify for include the following:
- A term loan which is a lump sum of money that is paid to you in a loan and you pay it back in payments over time including an annual percentage rate of interest that is set to be paid on the loan as well.
- The line of credit gives you a total amount of cash that you can use for daily business when needed. This is used for short-term needs that help businesses bridge gaps between short and long-term business cash flow needs.
- Invoice factoring is another option for small businesses with unpaid invoices to use by getting pay advances on invoices that have been set out and not yet paid. Companies that provide these advances will then collect the money from the business when the outstanding invoices are paid plus a fee for lending cash up front as a service to the business.
- Merchant cash advances offer a way to get an advance on future credit or debit card sales. These are easy to use but you only want to use these in the last resort pinch as APR rates can range from 70 to 350% of the amount of the total loan.
Banks will generally still offer the best deals but there are some great alternatives out there to consider, especially as online banking and institutions are taking hold. Moreover, be aware of an online institution’s creditworthiness before you use them to get a loan. Make sure the institution is BBB approved and trustworthy before entering into any agreement with such an institution.
For more information on alternative loans that might benefit your business please feel free to contact us at Commercial Capital Lending with any questions you may have.