More and more, small businesses seek funding with alternative lenders as opposed to traditional banks. For one thing, traditional banks continue to make it hard for small businesses to access capital with increased guidelines and regulations. But let’s take a look at the other reasons:
Quick Access to Capital
First, alternative lenders often offer faster approval processes and funding timelines compared to traditional banks. For businesses in need of immediate funds to seize opportunities or address urgent expenses, alternative lending can be a quicker solution. As an example, PHAZIS Funding can have funding in a merchant’s business bank in as few as two business days after approval!
Flexible Eligibility Criteria
Additionally, alternative lenders may have more lenient eligibility requirements compared to traditional banks. This makes it easier for small businesses with less-than-perfect credit scores to qualify for financing.
Tailored Financing Solutions
Furthermore, alternative lenders often offer a range of financing products designed to meet specific business needs. Whether it’s working capital, equipment financing, or expansion capital, small business owners can find options that align with their specific needs.
Transparent Fee Structures
Some alternative lenders offer transparent fee structures with no hidden charges or prepayment penalties. As a result, small business owners have more clarity and predictability regarding their borrowing costs.
Support Early-stage Small Businesses
Finally, alternative lenders may be more willing to extend financing to early-stage businesses that lack a substantial operating history or track record. In fact, this helps many newer businesses get off the ground and fuel their growth aspirations.
In short, the best reasons for small business owners to seek financing from alternative lenders revolve around the accessibility, flexibility, and tailored solutions offered by these non-traditional sources of capital. Ultimately, the more obstacles that traditional banks put on accessing the funds small businesses need to grow, the more the use of alternative sources will gain speed.