When you're hungry you go to a restaurant and when you need money you go to the bank. We all know and are used to these traditional ways, but guess what. There's always another option. If you're too tired to go out to eat, you can order UberEats or DoorDash and if you don’t like the terms of your bank loan, you can turn to alternative business financing. The point is there is always an option. A business can not survive without some form of capital supporting it and it’s easy to follow a plan for your business that doesn’t align with your goals and terms. Don’t put your business in jeopardy because you didn’t research options! Keep reading to explore your options and clear up any confusion about financing your business.|When you're hungry you go to a restaurant and when you need money you go to the bank. We all know and are used to these traditional ways, but guess what. There's always another option. If you're too tired to go out to eat, you can order UberEats or DoorDash and if you don’t like the terms of your bank loan, you can turn to alternative business financing. The point is there is always an option. A business can not survive without some form of capital supporting it and it’s easy to follow a plan for your business that doesn’t align with your goals and terms. Don’t put your business in jeopardy because you didn’t research options! Keep reading to explore your options and clear up any confusion about financing your business.
Yes. Even though some people use these two terms interchangeably, they are two different things in the business world. The term loan refers to a financial institution lending money to a borrower whereas financing is a foreign term that includes multiple methods of obtaining funds for a specific purpose. The main difference between the two is where the capital is coming from and then the terms each source agrees on for the arrangements. Here's a breakdown of the main differences:
Alternative financing can come from a variety of sources influencing crowdfunding, angel investors, online lenders, and more. Each has its lending criteria and terms, but they all share the idea that it is a non-traditional means of obtaining funds for a specific purpose. On the other hand, a bank loan is the traditional form of obtaining funds and they come directly from your given bank or financial institution.
Alternative financing lenders are typically more flexible when it comes to lending criteria. They're there to work with you on a more personal level to find ways to make sure your business is successful. What happens if you have a strong business but poor business credit? A bank may deny you. but alternative financing lenders will look beyond the surface criteria. They may consider other factors beyond just credit scores, such as cash flow, the health of the business, or the potential of your project. This can be helpful for business owners that do not fit the strict criteria of a bank loan. Bank loans have a thorough process and it may be harder to secure funding. They are more strict when it comes to reviewing the criteria of your business and are more likely to deny you if your credit history, income, collateral, and business plan do not match their qualifications.
This is where business owners begin to truly understand what fits their business needs or does not. Alternative financing has many benefits but can have higher interest rates than bank loans. Not all funding options from alternative lenders have higher interest rates, but they vary widely. Business loans typically have lower rates and are willing to give more money. It depends on your bank or financial institution, but you may be able to receive from tens of thousands to millions whereas alternative financial lenders usually provide from as little as 5,000 to one million.
Bank loans and time go hand in hand. The application process for a bank loan can take up to 90 days just for approval. They have multiple employees reviewing your application and a lot more paperwork to review. If you want to avoid this lengthy process then alternative financing is for you. Within 72 hours to even the same day you can potentially receive funding and the application process is much simpler.|
Yes. Even though some people use these two terms interchangeably, they are two different things in the business world. The term loan refers to a financial institution lending money to a borrower whereas financing is a foreign term that includes multiple methods of obtaining funds for a specific purpose. The main difference between the two is where the capital is coming from and then the terms each source agrees on for the arrangements. Here's a breakdown of the main differences:
Alternative financing can come from a variety of sources influencing crowdfunding, angel investors, online lenders, and more. Each has its lending criteria and terms, but they all share the idea that it is a non-traditional means of obtaining funds for a specific purpose. On the other hand, a bank loan is the traditional form of obtaining funds and they come directly from your given bank or financial institution.
Alternative financing lenders are typically more flexible when it comes to lending criteria. They're there to work with you on a more personal level to find ways to make sure your business is successful. What happens if you have a strong business but poor business credit? A bank may deny you. but alternative financing lenders will look beyond the surface criteria. They may consider other factors beyond just credit scores, such as cash flow, the health of the business, or the potential of your project. This can be helpful for business owners that do not fit the strict criteria of a bank loan. Bank loans have a thorough process and it may be harder to secure funding. They are more strict when it comes to reviewing the criteria of your business and are more likely to deny you if your credit history, income, collateral, and business plan do not match their qualifications.
This is where business owners begin to truly understand what fits their business needs or does not. Alternative financing has many benefits but can have higher interest rates than bank loans. Not all funding options from alternative lenders have higher interest rates, but they vary widely. Business loans typically have lower rates and are willing to give more money. It depends on your bank or financial institution, but you may be able to receive from tens of thousands to millions whereas alternative financial lenders usually provide from as little as 5,000 to one million.
Bank loans and time go hand in hand. The application process for a bank loan can take up to 90 days just for approval. They have multiple employees reviewing your application and a lot more paperwork to review. If you want to avoid this lengthy process then alternative financing is for you. Within 72 hours to even the same day you can potentially receive funding and the application process is much simpler.
The decision of which funding is better is up to the business owner to decide. Finding a financing option involves deciding if a bank loan or alternative financing fits the borrower's specific needs, financial situation, and ability to meet the respective lender's requirements. A bank loan is a traditional financing option provided by banks with strict lending criteria, competitive interest rates, and longer processing times. Alternative financing involves non-traditional sources of funds, more flexible lending criteria, potentially higher interest rates, and faster approval and disbursement processes. It is in your best interest to thoroughly research multiple financing options before you decide which is the best fit for your business. |
The decision of which funding is better is up to the business owner to decide. Finding a financing option involves deciding if a bank loan or alternative financing fits the borrower's specific needs, financial situation, and ability to meet the respective lender's requirements. A bank loan is a traditional financing option provided by banks with strict lending criteria, competitive interest rates, and longer processing times. Alternative financing involves non-traditional sources of funds, more flexible lending criteria, potentially higher interest rates, and faster approval and disbursement processes. It is in your best interest to thoroughly research multiple financing options before you decide which is the best fit for your business.
Good credit is essential in securing a business loan. A good credit history shows the borrower's ability to manage debt responsibly and makes the lender trust the borrower's ability to repay the loan. A strong credit score provides you with lower interest rates, easier loan approval, higher loan amounts, and better loan terms. Compared to traditional banks, alternative lenders are less strict with credit requirements and accept a wider range of scores. Instead of only focusing on credit scores, alternative lenders take into consideration other factors such as cash flow and the potential of your business. If your business has less-than-perfect credit then this is a large determining factor in the decision of which financing method to use. |
Good credit is essential in securing a business loan. A good credit history shows the borrower's ability to manage debt responsibly and makes the lender trust the borrower's ability to repay the loan. A strong credit score provides you with lower interest rates, easier loan approval, higher loan amounts, and better loan terms. Compared to traditional banks, alternative lenders are less strict with credit requirements and accept a wider range of scores. Instead of only focusing on credit scores, alternative lenders take into consideration other factors such as cash flow and the potential of your business. If your business has less-than-perfect credit then this is a large determining factor in the decision of which financing method to use.