Short Term Loans Offer More Lending Options
Struggling through today’s marketplace is the everyday life of your average small business owner, even through small businesses are the backbone of the economy and create more jobs than in any other area. For all the hard work and dedication that goes into a budding small business, banks and other lenders generally prefer the impersonal interactions with corporate business, and rarely finance small businesses if a big business is also on the look out for funds. For these reasons, among others, short-term loans are an attractive and intelligent choice for small business owners to make when in comes to outside financing.
Why Lenders Prefer Big Businesses
Banks prefer big business for a variety of reasons, with the most glaring being bigger businesses are generally considered more likely to be able to repay loans. Having been in the industry for years, bigger businesses use loans to expand and better their business, instead of get it off its feet, like in a small business. Small businesses are expected to be funded through personal credit cards or home equity, and are not necessarily treated with the same seriousness larger businesses are treated with.
Short Term Loans by Alternative Lenders
With big banks pulling away from financing small businesses, alternate lenders are taking this opportunity to shine, offering specialized products like Merchant Cash Advance (MCA) loans, factoring, franchise loans and equipment loans to small businesses that need it. Compared to the interest rates offered by banks, short-term loans may seem a bit steep, when compared to the interest rates of credit cards, MCA loans, or similar short-term loans, are much more affordable. If your small business has to opportunity to utilize the services offered by banks at a lower rate, by all means take advantage of it.
Because banks are becoming less and less likely to lend to small businesses, alternative lenders are a wonderful option for the small businesses that really need it.