Why alternative lenders are becoming popular with small businesses

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.

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