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Vaibhav Pal

Why Alternative Financing Options Might Be Best For Your Business

Small businesses account for over 44% of all economic activity in the United States but when it comes to business funding for smaller enterprises, the banking system is not supportive at all. The major banks simply refuse to provide the funding to such businesses or just allow them to get stranded in the systematic barriers of qualifying criteria, etc. In this situation, a system of alternative funding came up as the much-needed solution for fast and easy credit to the small businesses. The people behind this new system of funding make a conscious attempt to understand the needs of small businesses and create solutions that provide them maximum benefits.     

Looking for unsecured funds? 

Are you looking for unsecured small business funding to meet an urgent requirement? While the big lenders will not consider your application favorably, the alternative sources of credit are in the market precisely to leverage such risks. They won’t bother you with checking your credit history either. 

What matters to them is how viable and profitable your business is. For that they will verify your bank account statement of the last 6 months to a year and draw their conclusions. If you have had a steady cash flow during this period, rest assured that you will get the loan.  

Have a poor credit history? 

Don’t worry if you have had a history of loan repayment defaults in the past while applying for a loan from an alternative business lending agency. Their understanding of how small businesses operate is pretty sound and they know that these little bumps can occur in the journey of small businesses much like an infant learning to walk. 

Unlike the qualifying criteria of big lenders where a borrower must have impeccable books of accounts with strong cash flow in and out, the providers of alternative credit work differently. For small cash advances, that most small borrowers need, past credit history is not of much help. If they have a good cash flow statement that is reassurance enough that the risk is in balance.  

Most small businesses are cash-strapped when it comes to investment in growth. When they see an opportunity that needs more money to tap than what they have at hand, the only way out is to look for business capital loans. Alternative lenders understand such situations very well and they provide the funds to such businesses without any hassle.  

The very nature of growth in small businesses is that opportunity knocks on the door in the most unlikely of times. They are caught unprepared but at the same time cannot let the opportunity go without a try. Merchant cash advances are meant to precisely meet these kinds of urgent funding needs. 

The small business sector is worth over $6 trillion, which is not the kind of market that any US business funding company, big or small can afford to overlook. That explains why the banking majors are partnering alternative providers of credit to tap the small business funding market. The business model shows a sound recovery record, which proves that the risks in lending to smaller businesses is not as high as the big lenders presume. 




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Vaibhav Pal
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