The landscape for financing small businesses is continually changing. Now, there are more options to get your business off the ground or grow it larger than ever. Still, small businesses like yours face challenges in getting the capital they need to reach their full potential. Finding the right financing can be a challenge, but more businesses are reaching out to alternative funding sources like us at Finance Factory. Today, we’re talking about the advantages of choosing an alternative funding source vs. local banks.
Advantages of Choosing an Alternative Funding Source vs. Local Banks
Traditional banks aren’t always equipped to offer quick access to funds, especially when a small business really needs less than $200k-$250,000. There are so many benefits to having alternative funding sources compared to banks as a small business owner:
Chance for Opportunities
As we mentioned, banks don’t always have the money or want to give the money if it’s not a price they like. This leaves small businesses closed-off to a lot of opportunities. But, going to an alternative funding source can open new doors. Many alternative sources like us at Finance Factory can provide smaller loans that will help you immediately. These types of loans are great for starting small operations, hiring a few employees, obtaining needed supplies or equipment, or office must-haves. These loans are also great for expansions or buyouts in order to keep your business your own.
Speed and Readiness
When you apply for a loan with a traditional bank, you should be prepared for a lengthy process. Typically, you have to submit an application and all related documents. After the bank reviews your application, you’ll have to schedule a time to meet to discuss your application with a bank representative. Then you’ll be able to go over your qualifications. This part of the process alone can take more than a month to a few. It could then take even longer to receive the money you need.
Applying for a loan with an alternative source like us gives you access to an extremely streamlined process. Under our approval process, everything can easily be submitted online for your convenience. Our team will assess your application and analyze your business within a day and get back to you right away. You can typically expect your funds within a few days or in extreme cases, the same day.
We mentioned the application and approval process above. But, did you know there are costs associated for applications with banks? Many, if not most banks require a lot of upfront costs without a guarantee you will be approved for a loan. There are application fees to be paid without the security of ever getting a loan and then you’re out more money. Then there are also origination fees where you pay a flat fee to get started or you can pay a percentage of the amount. Alternative funding sources, however, are going to be a much more inexpensive choice when applying because of either low or no cost applications.
Qualifications for Loans
We’ve mentioned in previous blog posts that some banks may not offer you funding if they don’t like your business. This happens a lot with those entering into the medical marijuana dispensary industry or more niche business ventures. If a bank doesn’t like what you sell, they won’t give you money. Banks typically have strict requirements. They might require that your business be several years old or have you submit an extremely detailed and formal business plan. A credit score is also another HUGE aspect in getting approved by a bank. They are going to scrutinize not only your business’s credit score but usually your personal one too.
Working with Us
Alternative sources like Finance Factory will often help a variety of different businesses with their investments no matter the industry. We don’t always look at how old or new your business is and we don’t always ask for the most in-depth, perfect business plan. As long as you can sit down with and tell us about your business, we’ll listen and work something out. We will look at credit score, but don’t worry if it isn’t perfect. We have processes in place that can help us both out.
Whether you’re an old business or just getting started, an alternative funding source like Finance Factory may be your best option. Meet with us, and we can talk about all of your needs and goals and work something out perfect for your company. If you have more questions about what we do and how we can help, reach out! We’d love to hear about your company!
Interested in finding funding for your business? Finance Factory would love to help! If you’re looking to fund your business within the next 30 to 90 days for $25,000 to $500,00 and have a credit score of 660 or better, let’s chat! Get pre-qualified right now with our quick-step pre-qualification form! And don’t worry, this will not result in a hard credit inquiry of sensitive information. We just want to learn more about you and your business. Click below to get started!