Skip the Bank: Online Non-traditional Lending is the Best Bet
According to the SBA, about half to two-thirds of small businesses are skipping the big banks and seeking financing from non-traditional sources. We’ve outlined three important reasons that foregoing a traditional bank loan can be a good option for funding your small business.
There are lots of reasons small business owners might need fast cash – both good and bad! What if you had the chance to purchase deeply discounted inventory and expand your product line? On the other hand, what if a major (and expensive to repair) piece of equipment breaks?
Most of the time, small business owners don’t have the cash on reserve or a line of credit that lets them withdraw badly needed funds.
Non-traditional lenders can offer business owners the opportunity to get cash quickly. For example, SmartBiz enables businesses to pre-qualify in 5 minutes, get pre-approved in 30 minutes, and receive funds as fast as 7 days after the application is complete, though timing depends on the size of loan.
The exact time it will take to close an SBA loan varies by case. For instance, one factor is how long it takes you to gather all of the paperwork verifying your financial status. Being organized can get the process going quickly.
Non-traditional lenders look beyond the strict requirements of traditional banks that can exclude even the strongest business from getting funds. Statistics show that 75% of small businesses that apply for traditional bank loans have been denied. While there are signs that banks are increasing their lending to small businesses, it’s estimated that big banks still approve less than one in five small business loan applications.
Reasons a bank might turn down small business owners include credit history, being in business less than two years, tax return losses or because the business is home-based. Sometimes, banks don’t explain the reason for the turn down at all.
Flexible loan repayment terms
There are lenders who require weekly or even daily payments. However, the SBA’s loan programs are generally intended to encourage longer term small-business financing. Favorable loan terms keep small business owners from struggling to make payments and protects cash flow needed for day-to-day operations. Make sure you’ve done a detailed cash flow analysis so you can calculate how much you can afford and what terms are best for you. If you’re interested in low payments and long payback, check out SmartBiz. Our loans have the longest repayment terms of available alternatives — 10 years. Additionally, borrowers can always repay the amount early with no penalty. Visit SmartBiz today and discover in about five minutes if you’re qualified for an SBA loan. Use the promo code “blog” and receive $500 off of your closing costs.