Small businesses used to have to look to traditional financial institutions to obtain funding; however, alternative lenders are becoming increasingly popular among this group. Here are a few reasons why:
- Shorter terms — alternative lenders generally offer shorter-term loans, important for businesses that have short-term needs.
- Faster processing — the business loan process at traditional financial institutions can last weeks. At alternative lenders, this process typically takes only a few days.
- Less paperwork — alternative lenders usually only require a few important questions to be answered online, as opposed to providing bank statements, tax returns and other financial statements at traditional financial institutions.
- No capital requirements — alternative lending services usually do not require businesses to put up capital like traditional financial institutions do.
- Flexible repayment options — alternative lenders are typically much more flexible in their repayment options and work to adjust repayments to coincide with a business’s cash flow.