9 Alternate Small Business Funding Options
Small businesses, start-ups, big corporations and everyone in between had their day-to-day lives disrupted due to the pandemic. When faced with financial hardship, many turned to traditional banking institutions for assistance. However, the majority of owners came to find that the path to fulfilling their financial needs can be rocky. In fact, roughly 80 percent of small business loan applications are rejected by banks. And for those lucky enough to get approved, the process from applying to the receival of funds can take anywhere from 60 to 90 days.
While bank loans have long been the go-to for businesses to obtain extra capital, the last few years have proven that lengthy applications, long approval times and high rejection rates are no longer cutting it. In turn, this shift has had a positive effect on the alternative lending market. The lending industry has risen in popularity for those who’ve been denied a bank loan, have a poor credit history, or are in need of immediate funding. In addition, they’ve also digitized the lending process, which is different from traditional banks which have notoriously fallen behind in terms of technological advancements.
When talking about all the types of small business funding options available today, there are certain factors that will ultimately determine which is right for you. Do you know what the loan will be used for? How much funding will you need? Or the amount of time do you have to pay it back? At the end of the day, obtaining capital is an essential part of business ownership and for any company that’s trying to succeed. Since there are so many routes that exist to getting that desired funding, entrepreneurs are encouraged to do their research before jumping into the application process. Here, we’re weighing the pros and cons of today’s most popular financing options available for small businesses.