W EEKLY EDITION JUNE 21, 2017
Financing Your Business … continued
(Based on a Dun and Bradstreet article entitled "Alternative Loans for Business. " The full text and additional
information can be found online here http://accesstocapital.com/resources/alternative - loans - business/ )
Which Alternative Lending Option Seems Right for You?
There is no single standard for determining the best alternative le nding
for your small business.
In general, the lending option you select depends on where you stand
on the small business spectrum. If you're just opening a new company,
you probably won't qualify for a big chunk of money from any lender,
traditional or a lternative. But for $25,000 or even $50,000, a peer - to -
peer lending option could make the most sense.
Conversely, if your business is up and running, and has a good track
record of revenue performance, a merchant funding platform would
likely meet your nee ds. If you're experiencing slow payment cycles from
clients and customers, then a factoring or revenue - based deal makes
good sense.
To protect yourself no matter what type of ending platform you use, make sure it adheres to the Responsible Business Lending
Coalition's Bill of Rights , which calls for greater transparency and accountability from all business lenders and financing
platforms, giving small business owners, as the RBLC puts it, "fundamen tal financing rights that we believe all small businesses
deserve."
Below is the complete set of rights embraced by the Responsible Business Lending Coalition — use it to shape your best choice
for small business lending options:
• The Right to Transparent P ricing and Terms , including a right to see an annualized interest rate and all fees
• The Right to Non - Abusive Products , so borrowers don't get trapped in a vicious cycle of expensive re - borrowing
• The Right to Responsible Underwriting , so borrowers are not p laced in loans they are unable to repay
• The Right to Fair Treatment from Brokers , so borrowers are not steered into the most expensive loans
• The Right to Inclusive Credit Access , without discrimination
• The Right to Fair Collection Practices , to prevent har assment and unfair treatment.
Build Your Business Credit Now
Even when seeking alternative funding over traditional, you still may need to have strong business credit. While the alternat ive
loan process generally isn't as long and doesn't have as strict o f standards, that doesn't mean lenders won't look at your
business credit report. Regardless of what type of lending you apply for, being able to show that you pay bills on time and
manage your finances well can only help you.
It's important to remember t hat any credit history takes time and planning. First, start by building your business credit and
getting a free D&B® D - U - N - S Number if you don't already have one. Once you've got a solid report, start monitoring your
profile so you're always on top of changes to your scores and ratings .
As your business grows, and you maintain your profile, your business credit will grow too. After you've built up a robust and
beaming business credit file, you may be able to get traditiona l funding as well.
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