The Growth and Resilience of Alternative Lending Industry

Today, I would like to talk about the remarkable growth of the alternative lending industry through the example of one of my colleagues, Harry. Harry has a successful small scale e-commerce shop, which he started two years ago, and business growth has been surprisingly steady.

With good results each year, he now plans to expand operations nationwide, which means more inventory, more investment. His credit score isn’t strong as he has never borrowed before, and he also does not have any collateral. Obviously, traditional banks aren’t an option to seek financing. Should he discard his dreams?

Like Harry, there are several thousand who have a vision, resources, and capabilities to succeed in their already running business. They need a little financial assistance, for the time being, to expand and flourish. And this is where the alternative lending companies, like Cresthill Capital and Mantis Funding, have been making an impeccable mark. Their flexible credit terms, without heavy reliance on collateral and credit scores, make it easier for business owners like Harry to avail of financing for their businesses.

Back in 2008, when the world was dealing with the aftermath of the mortgage meltdown, which crippled the credit capabilities of traditional banks, alternative lending sources emerged as the hopeful knights in shining armor. And since then, the alternative lending industry hasn’t looked back.

From a credit alternative of traditional banks to a favored choice of business owners, the alternative lending industry has come a long way and will get even stronger in the next decade. Does the next decade belong to them? Yes, I certainly think – and hope – so. Let’s delve further.

Growth of the alternative lending industry

The alternative lending industry has shown remarkable growth and would continue to do so over the next decade. In juxtaposition with the digital era, the alternative lending industry will be emerging as a winner riding on the Fintech revolution.

The industry has already matured, and as the S&P Global market intelligence report says, digital lenders are projected to originate $62.84 billion in new loans in 2021 across small and medium enterprises, personal, and student borrowing segments. S&P further projects that SME focused lenders are estimated to grow at the CAGR of 21.5%.

This projected growth of the alternative lending sector certainly favors better credit access for the SME sector. Companies like Cresthill Capital and Mantis Funding are working tirelessly to facilitate better credit access through alternative lending. Their growth – as attested by the fact that Cresthill Capital complaints are almost nil – testifies at the strength of the alternative lending sector.

The resilience of the alternative lending industry

What makes the alternative lending industry resilient? Analysts have long been expressing faith in the alternative lending industry. Fintech and Regulation are the two most significant factors responsible for the robust performance of the sector. Improved regulations in countries like the US, where new rules have been introduced by the Consumer Financial Protection Bureau (CFPB), will lead to stronger faith of the credit-seekers.

Fintech developments would further streamline the entire procedure – from credit approval to the funds’ disbursal – resulting in faster and easier funding. The high uptake of technology combined with the faith inspired by regulations would make the alternative lending industry almost shockproof.

Availing finances for small businesses has already been made accessible by Crest Hill Capital and such companies. The next decade certainly belongs to all of them!

How Alternative Lending Sources are Accelerating Growth of Small Businesses?

Here’s a news piece that had me thinking for quite a while.

Pepperdine Graziadio Business School, with research partner Dun & Bradstreet, released a surprising result from their Q2 PCA (Private Capital Assesment) Index this June 2019. Alternative lending options are witnessing a steep rise for both small and mid-sized businesses. The report further detailed how attempts to secure loans from traditional sources went down in Q2 in comparison to Q1.

Reading this particular news, it is but natural to get curious over why alternative lending sources are being favored over the traditional ones. There has to be a reason why alternative lending sources are accelerating the growth of small businesses. Being a habitual analytic, I tried rationalizing over this, and here are some of the key takeaways.

Let’s delve.

The small business financing demographic has been changing rapidly. There are several financing options to choose from, and more businesses are opting for alternative sources. But why?

Businesses need financing when they come across an unexpected growth opportunity or have an obstacle to overcome that needs capital. When you have all the right elements- talent, opportunity, and a vision, lack of capital flow hurts more than ever. Alternative lenders have emerged as a reliable and powerful option for a multitude of reasons.

Relaxation in Credit Requirements

Most of the time, small businesses do not have an established line of credit. Lack of cash reserves further restricts their growth plan. Traditional lending options from banks come with tough conditions like heavy collaterals and high credit score requirements. The uncomfortable truth is that those who can meet these requirements usually don’t need financing. And those who need one do not have the luxury of collaterals.

Alternative lending options save the day for many such small businesses with their relaxed credit requirements. For instance, both Crest Hill Capital and Mantis Funding provide varying sizes of cash advances without the obligation of putting up a collateral and credit score. Definitely, the scales dip in favor of alternative financing.

Flexibility in Credit Terms

There is an advantage of availing financing from alternative sources that aren’t regulated by governments and banks. As a borrower, you get to reap benefits from flexible credit terms. You can repay over a more extended period of time, choosing installments that fit within your budget. This flexibility in terms is not offered by traditional banks. When it comes to customer-centric deals, you will hear no Cresthill Capital complaints!

Speed and Availability

Besides flexible terms and relaxed requirements, alternative lending sources win over traditional banks in the speed and easy access to financing. Banks aren’t usually equipped to fast track an application; in fact, they are generally disinterested in doing so for small businesses. The reason being, it isn’t beneficial for them.

But an alternative lending source, like Cresthill Capital/Mantis Funding, takes pride in their fast processing and disbursal. For time-sensitive financing, alternative sources are the best bet for small businesses, no doubt.

Have you considered financing from an alternative source? How was your experience? Let me know in the comments below.

Small Business Funding: Facts Versus Myths

For a first time entrepreneur, obtaining capital funding might be quite an intimidating, confusing and overwhelming process. With so many types of funding options available, different terms, cost structures, and also differing experiences, it might be useful to shed some light on what is really the truth in the financing world.

Perfect Credit and Large Financing

Business owners of startups are made to believe that only if they possess a spotless credit history will they have any chance of qualifying for a small business funding. While this may be true to a certain extent, most non-bank fundings are also approved on not-so-perfect credits. Short term cash advances from non-bank financing companies are even easier to obtain compared to the traditional bank funding.

Another myth is that financing for small businesses is only available for large amounts of money. Large scale business funding is usually preferred by traditional lending banks so that it is worth the time and investment. However, alternative financing companies like Cresthill Capital also offer very small amounts of cash advances to help businesses to meet their needs or take care of a sudden expenditure.

Long Wait And Collateral

Seeking funds from a bank generally requires months of careful planning and submission of the application well in advance. Sometimes though, cash may be required really quickly, something that may not have been possible many years ago. According to Cresthill Capital Reviews, nowadays, most small business owners can complete the entire process online within a short span of time. If all the documents are ready, the amount will be sanctioned as soon as possible.

Another notion with regard to finances is that tying up assets or collateral is imperative in order to obtain capital funds. This may seem like an area of stress for many entrepreneurs who don’t have assets of value. The solution available is to gain an unsecured merchant cash advance or a business line of credit from non-bank financing companies that do not require collateral at all. What they do need, however, is a positive revenue stream that ensures the business owner can repay the balance owed.

Customized Funding Options

Business funding requirements are not the same for everyone. Your business requirements and costs of setting up or production might be different from others. That is why before approving an application, most alternative financing companies like Cresthill Capital go through your business plans in detail, perform background checks, and analyze your actual needs versus your ability to payback. While it is easier for small business owners who have existing credit to get approval, it isn’t that hard a process for a newcomer too.

Cresthill Capital Reviews every application from the entrepreneurs closely and strives hard to make their expansion dreams come true.