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.