The Benefits of Alternative Lending for Small Businesses

companies report increasing wages

More and more businesses in the United States are starting to veer away from the traditional bank loan in favor of alternative lending. The traditional bank loan, after all, comes with a plethora of headaches. Do you need to increase your cash flow and are wondering which type of financing is right for your small business?

Invoice factoring, one of the most popular forms of alternative lending, might be the solution. Check out how invoice factoring stacks up against the traditional bank loan:

Debt free, risk free.

When you borrow money from the bank, you are inevitably going to be spending the bank’s money—and usually with a steep interest rate. Alternative lending practices can offer routes that require you to accrue far less debt, and sometimes none at all.

With invoice factoring, you never take on a single penny of debt. Factoring companies purchase your outstanding invoices from you. They never lend you any of their money. Rather, the money you receive is the money that you are already scheduled to receive. You simply get it faster, freeing you up to make future business investments.

Bad credit history? No worries.

Banks are very tough to work with if you are a small business/start up. 43% of American businesses that apply for bank funding either get less than what they need or get flat out rejected. Alternative lending practices typically tend to worry far less about your credit history.

Factoring is no exception. In fact, your credit history does not even come in to play throughout the process. Since invoice factoring companies buy your invoices from you, and never lend you a cent of their own capital, your credit history is irrelevant. Rather, it is the credit of your debtors that gets considered.

It’s fast.

The majority of alternative lending practices offer cash flow solutions within days of your requesting them. Factoring companies typically put debt-free cash in your account within 3 to 5 days of agreeing to work with you. That sure beats the 45-90 days that you would have otherwise waited for your debtors to pay back their loans!

Ready to start?

Invoice factoring is the best method of alternative lending. Factoring companies provide a debt-free, fast solution to your cash flow problems. Are you ready to start maximizing your small business’s potential? Request a factoring quote and start taking advantage of all of the benefits that come with invoice factoring.