You’re no longer living in a day and age where a standard bank loan is your only option if you’re in the market for business funding. These days, there are plenty of alternatives that offer much better solutions, especially if you actually run a small to mid-sized niche business, as opposed to a larger company. However, you still need to know what criteria differentiate an especially appropriate solution from all the rest. The following are some great examples to keep in mind.
Application Process
If you’ve ever applied for a standard bank loan before, then you know most banks don’t exactly make the process simple. There’s often an entire avalanche of paperwork involved, not to mention numerous minute tasks that need to be completed before you can even be considered. Many small business owners wear multiple hats when it comes to their day-to-day operations, and some may even be running things all by themselves. That doesn’t leave a lot of free time to work your way through a ton of paperwork, so an easy application process is key. Prioritize lenders that streamline things for applicants to the greatest extent possible by requiring minimal documentation.
Approval Speed
There are plenty of reasons why a small business owner might be looking to apply for funding. Sometimes they’re looking to fund a future expansion or a few non-critical equipment items, but it’s a lot more likely that they’re looking to cover the cost of necessary repairs, critical upgrades, or payroll coverage during the offseason. In other words, you need your funding as quickly as possible. A typical bank often takes weeks, if not months, to come through, but alternative lenders are much faster. Applying for funding online is perhaps the fastest option of all, so definitely don’t count the internet out when considering your options. Some lenders will even let you fill out a 5 minute business loan application and get you access to your funds within 24 hours or less.
Flexible Terms
Whether or not you’re thinking of borrowing from a traditional bank, you want to make sure the associated terms are flexible enough to serve the needs of your business. Although the right bank may be able to offer you what you’re looking for, alternative lenders are generally going to have more different choices available. For instance, you may be eligible for more different types of credit (e.g. a revolving line of credit or a cash advance), or there may be fewer restrictions on how you’re allowed to use the funds you receive. Many online or alternative lenders will let you forgo a standard credit check as well, especially if you can prove your business is already in the black with bank statements or other simple documents.
Great Reputation
Last but certainly not least, you’ll want to do a little homework on the lenders you’re considering once you’ve narrowed down your options. How do other people who’ve borrowed from that lender feel about their experience? Would they go with the same company again if they had to borrow money in the future? How does each lender stack up against its competitors when it comes to key factors like interest rate and repayment structure? Does the lender have a good Better Business Bureau rating? Keep in mind that even if you’re in need of emergency funds, your choice in lenders is still a business decision, so you want to cover all the bases.
At the end of the day, it pays to understand all the alternatives available to you when you’re looking for small business funding. Start your search today, and discover how simple getting a business loan can actually be here in the 21st century.
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