W EEKLY EDITION JUNE 21, 2017
Financing Your Business
(Based on a Dun and Bradstreet article entitled "Alternative Loans for Business." The full text and addi tional
information can be found online here http://accesstocapital.com/resources/alternative - loans - business/ )
U.S. businesses, especially smaller ones, may have a problem.
Increasingly, America's businesses are having trouble getting the financing they
n eed to keep the lights on and keep revenues rolling in. Enter alternative
lending as — well, an alternative — to traditional loans or self - financing.
What are Alternative Loans?
A lternative loans (also referred to as "FinTech") cover a broad array of business
loan options available to start - ups and existing businesses that fall outside of a
traditional bank loan. Alternative loans are in demand for one major reason —
increasingly, c ompany decision - makers cannot obtain a traditional bank loan. As
larger financial institutions have slowed the lending spigots in the years
following the Great Recession, many small businesses are labeled as lending
risks .
Into the breach has stepped alternative lenders, who cater directly to small
business owners and can consider often - overlooked (by banks, primarily)
sources of collateral, like rea l estate, future revenues, or outstanding client invoices to secure the loan.
To provide a more appealing option to small businesses, alternative lenders are usually more flexible than larger financial
institutions on loan repayments (many offer flexible schedules, for example) and often green light loan approvals much faster
than banks, often getting business owners within 24 - 48 hours of the loan application. With speed, convenience and flexibility
as selling points, alternative loans are among the fastes t - growing financial tools for small businesses available today.
How to Get Started
The first thing you need to know is what options are available and when to best utilize each. Entrepreneur magazin e outlines
four different situations in which alternative lending might be the right option for your company:
• Starting your business
• Expanding your business
• Purchasing inventory
• Strengthening your business
In each of these cases, you should have a clear understanding of your business goals, how the money will be used, and the
terms for each of your loan possibilities.
A N ew York Times article profiled Ivan Rincon, a small business owner looking to diversify his apparel offerings. After being
rejected by traditional banks, he looked toward alternative lending. After an initial merchant cash advance, Rincon realized this
wa s not the best option to expand his business. He then began exploring other types of alternative lending that better fit his
expansion goals.
Types of Alternative Lending
"Which type of alternative financing may be best for me?" To help answer that query, here's a look at some of the most
popular types of alternative lending below. Find more lending resources and types of loans here .
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