In the past years, alternative financing has become more and more popular with small business owners looking to borrow funds on short notice. After the financial crisis hit, traditional institutes such as banks stopped lending short sums of money to business owners who required cash quickly. They made borrowing difficult and rarely approved any loan requests, especially for small business owners.
This article will discuss some of the benefits associated with borrowing money from alternative sources.
How Does It Work?
It doesn’t matter where you’re based in the UK, if you’re looking for loans for a business in Surrey, Reading or London and you’re having trouble securing funds from traditional sources, you can always contact an alternative money lender. Most alternative money lenders are fully licensed and regulated, so you can rest assured that the process of borrowing is safe.
Not all alternative money lenders operate in the same way, but most follow the same type of structure.
- You’ll apply online to see whether you qualify for a business loan.
- The online information you provide will consist of monthly takings, years in operation and the amount of funding required.
- Once you submit your request, a company representative will assess your application.
- They may or may not request additional information.
- If the loan is approved, you’ll receive your funds within 7-10 days.
What Are the Benefits?
Alternative money lenders are smaller institutions that specialise in lending funds to SME’s, so they are better equipped to deal with your requests. Traditional banking institutes don’t have as much freedom when it comes to loans, applications must be reviewed by numerous company representatives before they’re given the green light to go ahead. The same doesn’t exist when you deal with alternative money lending organisations. If your loan application is approved, you could have the money in your bank within a week, you won’t be left waiting for long periods like you would with banks or credit unions.
If you’ve already applied for a small loan off a traditional lending institute, you’ll know that they ask for all kinds of intrusive personal information to secure a loan agreement. Even after supplying everything they requested, you’re not guaranteed to have your loan approved. Alternative lenders don’t require as much information, they can approve loans based on monthly income and trading period, they don’t only offer secured loans, they also allow approve some business owners for unsecured loans.
Alternative lending organisations continue to spring up everywhere, making competition fierce in this area of finance. This is great for borrowers because to compete, lenders are forced to continually assess their interest rates. The more saturated the market becomes, the lower the interest rates go.
Alternative lenders offer small business owners another option when it comes to financing their company, they make it a lot easier to secure funding for all kinds of business ventures. Without these types of lenders, SME’s would struggle to expand and capitalise on opportunities within the market. They can assist your business is numerous ways and interest rates are extremely competitive.