9 Things You Must Know Before Considering Alternative Financing for your Business

1 . Is Alternative Finance a scam?

If you’re reading this, you’ve probably heard of alternative financing and are seeking more information on it before making an important decision.

But with more traditional options like bank loans, it’s impossible not to ask the question: is alternative financing a scam?

The answer: a resounding NO. Today, you’ll find out why.

Let’s dive into it, shall we? (Hope you said yes or this would be really awkward)

2 . What exactly is “Alternative Finance?”

I know what you’re thinking; cut the nonsense and give me the info I need to know about it.

To spell it out, alternative finance is where private lenders provide business owners fast capital as quickly as they’ve (previously) only dreamed of and allow them to wave goodbye to the aches and pains of working with big banks. (I promise this gets less salesy.)

Private lenders are (for the most part) non-institutional and have no connection with the banks. That means they are not nearly as accountable for the ROI of their loans as public institutions like banks.. For this reason, alternative lenders are much more flexible about who they do business with and what kind of financial solutions they can offer.

Unlike banks, which have red tape and endless hurdles involved in the application and approval process, alternative lenders don’t need to squeeze you into a neat little box for you to meet their criteria.

Quick story:?

During the recession in 2008, bank loans were harder than ever to get approved for. Business owners had to pivot and obtain the funds they needed to either keep their business alive or grow it by other means. This ultimately gave birth to the modern alternative lending industry.

Multiple studies by Forbes and other reliable financial info sources show that big banks like Chase, Bank of America, & Wells Fargo denied ~80% of small business loan applications during the COVID-19 pandemic. It got so bad that the government had to step in with bailout programs such as PPP to quickly inject cash into businesses and keep them alive.

3 . Who is this industry for?

Many people believe alternative financing is only for businesses with bad credit that can’t find a loan elsewhere. While it is true, this industry is a perfect fit for business owners with poor or no credit history who need cash to grow, it is also a great option for business owners of all credit scores. (Before you think, nice sales pitch) Consider the following…

Big banks traditionally place a large emphasis on a business’ credit score when deciding whether or not to issue a loan. If the score isn’t up to par, your business is out of luck. Rather than funding based solely on “credit worthiness” from lousy institutions that know nothing about you and your specific situation, alternative lenders can help businesses qualify based on personal assets, sales, accounts receivable and more! They are private individuals like us who understand your situation and make you feel human, unlike banks.

Also, their redefined criteria of “creditworthiness” can make a HUGE difference in the amounts you’re able to get approved for.

Alternative finance is for people seeking a more user-friendly experience, higher funding amounts and a faster approval decision.

Which leads me to my next two points…

4 . How much can I qualify for?

There’s an old saying: banks only give out umbrellas when the sun is shining.

It’s true: banks are highly risk-averse, and won’t eagerly accept everyone. (On a typical year denying ~75% of business loans) Also, if you apply for a $100K loan, you might be lucky to qualify for $50K through a bank.

The good news is: alternative lenders are eager to finance your business and approve you for as much as possible.?

Because alternative lenders are not beholden to a rigid bureaucratic structure, there’s more wiggle room for them to work with you. When you apply for a $100K loan, alternative lenders are much more likely to grant your request. They may even help you to qualify for an even higher amount!

In fact, terms, rates, and everything else about the loan are open to negotiation based on your needs. It’s near impossible to manipulate the cookie-cutter funding options that banks carry, and any adjustments may take weeks to process.

Which then begs the question…

5 . How fast can I get funded?

Banks are notorious for taking weeks (and sometimes months) to review applications and ultimately issue funding. In fact, this elongated wait period is one of the primary reasons business owners seek alternate methods of financing in the first place.

Alternative lenders are rewriting the rules by providing funding fast (in some cases, under 24 hours), with a more customer-friendly approach.

With alternative lending, you won’t experience the same wait periods that you do with a bank. Once you initiate the conversation and begin hashing out the details, things can move along quite quickly.

As soon as you submit the necessary paperwork to qualify for a business loan, the lender can send over the offer and get your loan approved! Most lenders will verify that you qualify with a soft credit check, rather than a hard pull. Banks and other large creditors use hard pulls, which negatively impact your credit score.

With fewer hurdles required, I’ve seen instances of business owners contacting a lender in the morning, and receiving funding by the end of the day!

In our fast-moving world where new opportunities need immediate attention, fast funding can make all of the difference.

6 . Are terms & rates set in stone?

Alternative lenders recognize every business has a unique set of challenges and financial situations. Nothing about your deal will be set in stone— alternative lenders are open to discussing the details of every loan to best fit you!

If you don’t fit nicely and neatly into the bank’s criteria box, you’ll receive a rejection letter. If alternative lenders are not willing to fund you for the requested amount, they’ll work with you to find a deal that fits your business. Based on your needs, they can adjust the rates, terms, amounts, and more!?

7 . Can I get multiple rounds of funding?

As your business grows, you may need capital at various stages later on. For example, if you opened a new location with the first round of funding, then a second round of funding might help you to refinish your first. Or, it could help you cover payroll for a new team of employees in anticipation of your seasonal rush.

Once you’ve repaid your first loan, you can return for even more funding and because you’ve already developed a relationship with the lender, receiving funding will be easier than ever.

Based on improved finances, you will likely qualify for better terms and rates!

8 . Do I need collateral?

The way that your loan is structured will depend entirely on your business and preferences. Typically, secured loans are more freely handed out by big lenders, as they are not taking on as much risk— in the event that the business owner defaults, the loan is backed by collateral, like real estate. Banks often only issue secured loans.

However, we have connections with multiple alternative lenders who take a step forward by providing both unsecured and secured loans.

Unsecured loans are structured to help business owners without any collateral receive financing at fair rates in a short period of time. And, it may also be the right choice for business owners who have collateral, but do not want to risk putting it up.

Alternative lenders can issue secured loans as well, which means business owners can qualify for better rates while receiving the same fast funding process!?

9 . How do I get the ball rolling?

I thought you’d never ask! (Probably because you didn’t) But hey, you’re still here, so kudos to you for reading through this information heavy (aka boring) report.

By chance that you’re interested in seeing what kind of alternative finance options you’d be eligible for. You’re more than able to reach out directly to shady lenders or brokers, who will be happy to have you fill out their companies specific paperwork and push you through to a sale of their product. (Shocker!)

That’s where GetFunded Consulting comes in. I know, I know, a shameless plug. But hey, you’ve come this far. I promise, 30 seconds and you can get back to your life.

My business pays (no small amount) to be part of a private lending network, along with thousands of other alternative loan brokers and more than 75 of the most trusted commercial lending companies across the nation.

If you provide us with some basic information on your current financial situation and what you need funding for. We’ll take your file (removing your name of course) and consult with some of the best loan brokers and lenders in the industry to identify the most optimal funding path for you and finally, we bridge the gap between you and the lenders who will get you the cash you need to succeed quickly!

The best part is, there’s literally NO fee for our service and NO obligation for you to follow through on the deal.

Don’t trust some shady broker. Get your file reviewed by a first class group of independent brokers who work with lenders from across the nation so you can sleep sound at night, knowing that you’re getting the best alternative finance option for you and your business based on multiple opinions.