A Guide to Alternative Lending

A Guide to Alternative Lending

As a business owner, you know how important a supply of working capital is. Perhaps you’ve run short in the past, turned to a traditional bank for a loan, and after a long application process, were denied. Fortunately, there are other forms of alternative financing to consider when you need an infusion of working capital.

Alternative Financing for Small- and Medium-Sized Businesses

Loans from traditional banks and credit unions are not your only solutions for cash shortfalls. Here are a few other alternatives, commonly used by the business community:

Merchant Cash Advances (MCA’s). Up-front cash obtained by the selling of their future credit card receivables.
Invoice Factoring. Useful for businesses that typically send out invoices to customers.
Secured and Unsecured Lines of Credit. Like having money in the bank to tap into if needed.
Crowdfunding. Asking for small sums of seed money from a large pool of online donors.
B2B Lending. There are businesses that exist to match up lenders with businesses needing funding.

Pros and Cons of Alternative Financing

Alternative financing options typically come with the following benefits:

Quick funding
Flexibility in use of the funds
Simple application process
High approval rates

Keep in mind that you will need to understand the costs and fees, if any, involved in each of the forms of alternative funding that you are considering. In some cases, the rates charged may be higher than typical loans. It’s important to make sure that the costs involved are acceptable and do not undermine your business premise.

Working with the right financing agent can help your business stay on track and grow. The experts at Gipson Commercial Solutions would like to become your preferred partner for business financing. They specialize in a full spectrum of alternative financing programs. Give them a call today.