5 Reasons Why Alternative Business Funding Is Killing It
Alternative business funding seems to be one of those big new buzz phrases that hit small business news every day. With alternative business funding groups and methods becoming an increasingly big reason why companies get started or even continue to be in business, it’s no shock that most major economists seeing this trend continuing for the foreseeable future. But, why are so many people choosing alternative methods to fund small businesses? We came up with five major reasons…
Banks are not as accepting as they used to be.
Simply put, it’s harder than ever before to actually get a bank to hand a loan to a brand new entrepreneur. If people regularly get rejected by banks, or are forced to choose between securing the loan with their home or walking away, they will end up getting frustrated with the old system. What we are seeing, more often than not, is that small businesses are getting fed up with the banking system as a whole, and are choosing a more accepting option.
Alternative methods often prove to be easier to deal with.
Banks and grants often require a mountain of paperwork, and also will have stipulations on how you can use the funds that you acquire. Most small business owners do not have the time nor the patience for red tape unless it’s absolutely necessary for the business’s ability to exist. If alternatives that provide a more direct way to get the money that’s needed, people will always choose it.
At times, alternative methods can offer better payment plans.
In business, the name of the game is often flexibility. With the nature of almost all businesses being one that has a natural ebb and flow, paying off a loan in installments can be difficult for some newer businesses. Unfortunately, traditional loans would almost always require installment payments. Alternative options, don’t. For small business owners that want flexibility, the choice can be obvious.
There are forms of alternative business funding that are actually really prestigious.
Not all alternative business funding methods are considered to be stigmatized. In fact, some, such as getting massive amounts of money via crowdfunding, may be considered to be prestigious. Businesses that are able to raise lots of money via alternate routes are often seen as hardier. So, some may even go the alternate route because it’s the “cool” thing to do.
Alternative small business lenders often provide money faster.
Traditional loans can take months to acquire. Newer forms of lending can take as little as two days. Which one is the clear winner here? Obviously, the faster option.
The bottom line is that alternative business financing is becoming a serious concern for banks, and that is a great thing for entrepreneurs in need of cash. Alterative lenders offer better requirements, less hassle, and more flexibility than ever before. Why wouldn’t others want to work with them?