Getting small business loan from traditional banks is difficult. The process is also time-consuming and there is no guarantee that a small business owner will obtain the loan. A small business owner that needs funding for their business should consider alternative lending. There are many alternative lenders nowadays offering easy and quick access to small business loans, although the loans are issued at a price. Alternative lenders always want to get higher returns from the loans they lend out. The advantage is that these lenders are always geared up to take risks on new businesses that do not have any hope of having their loan applications approved by traditional banks.
There are plenty of alternative lending options for small businesses. However, small business owners must face the reality that these loans come with higher interest rates and fees in order to obtain them. It is recommended that small business owner should not look at the higher interest rates and fees when trying to obtain small business loans from alternative lenders. They should look at the advantages offered by alternative lenders unlike traditional banks. One of the biggest advantages of alternative lending is simplicity. Loan application at a traditional bank is tedious.
A borrower must gather a lot of background information that includes a comprehensive business plan, 3-year financial statements and cash flow projections just to support the application. Alternative lenders, especially online lenders, have modest requirements. Most of them only need a small business owner’s 6-month bank statements and ID documents to obtain small business loans. Another advantage of alternative lending is speed. It takes hours or a few days for an alternative lender to approve a loan application. But with traditional banks, the whole process can take months with no guarantee of obtaining the loan. Fast lending can help small business owners seize business opportunities that can change their fortunes for the better.