4 Alternative Lending Options To Consider for Your Business
When you need additional cash for your business, your first thought may be to apply for a loan from a bank. However, there are several other options that you could consider. For new or small businesses, getting a traditional loan can sometimes be difficult. You may have better luck with alternative lending. These options often have requirements that are easy to meet and can come with better terms as well.
1. Lines of Credit
Depending on what you need the money for, getting a line of credit or a credit card instead of a loan might be a better solution. One of the benefits of credit is that, once you pay off the money you’ve used, it becomes available to use again. This can be a useful safety net for your business and can help if any financial emergencies come up.
2. SBA Loans
The Small Business Administration is a government agency designed to help small businesses with various needs. The SBA does not provide loans itself but works with lenders to help business owners get loans more easily. There may be additional requirements when applying for an SBA loan, but low credit scores or your length of time in business can be less of an issue.
3. Crowdfunding
One type of alternative lending that has recently become more popular is crowdfunding. Unlike other types of financing that may use only one source, crowdfunding relies on many people to provide smaller amounts of money. There are several websites dedicated to this that can make it easier for you. You can offer various benefits to investors, such as early access to your product, to make it worth it for them.
4. Accounts Receivable Financing
AR financing can be but does not need to be a loan. In some cases, your invoices serve as collateral to get funding, but often the financing company will simply buy your accounts receivable. This can be beneficial since you won’t need to pay anything back, and you will also no longer be tasked with collecting these payments.
Whether you have had trouble getting a traditional bank loan or you would just prefer to try out something else, alternative lending can be useful to your business. Because there are so many financing options available, you should be able to find one that fits your needs. Look into different types of financing as well as various lenders to determine what is the best choice for your business.
