As a small business owner, it can be quite difficult to obtain the funding you need to start, sustain, or grow your business. Many traditional lenders look for at least five years of tax returns before they will even consider lending to a business. This can be daunting as a business owner that wants to grow your business or is just starting. Luckily, alternative financing is often an avenue that many businesses can take to get the financing they need for their businesses. 

What are the Benefits of Alternative Lending?

Alternative lending can be attractive to many small businesses because these lenders often have more relaxed or lower credit requirements. Also, alternative lenders have easier eligibility requirements and the approval rate is often much quicker. All of these benefits can be helpful for small businesses that need financing pretty quickly but may not meet the traditional eligibility requirements of most traditional lenders. Traditional banks/lenders often have strict credit requirements as well as eligibility requirements that would make it difficult for many small businesses to qualify. 

What are Some Forms of Alternative Lending?

Fortunately, there are a wide variety of different types of alternative lenders available to small businesses. Alternative financing can come in the form of community development finance institutions which are typically nonprofit organizations that provide affordable/reasonable financing for small businesses. Alternative lenders also come in the form of venture capitalists. Venture capitalists are outside groups that will offer funding to small businesses for an agreed-upon percentage of ownership. The percentage of ownership is usually compatible with a company’s valuation. Partner financing is another form of alternative financing that allows small businesses to gain access to funding by obtaining an industry partner who provides funding in exchange for a combination of:

Access to your products
Staff
Distribution rights
Sales 

These are a few forms of alternative financing options available to small businesses. However, small business owners can choose from many different forms of alternative financing options to meet their specific financing needs. Contact Gipson Commercial Solutions for your commercial finance needs.