Many business owners do not have sufficient time to wait on the comparatively lengthy loan application process imposed by traditional financing options such as banks. There are a wealth of articles providing information about what options are out there for small business owners as well as well-established, larger firms. Some are not practical (such as requesting loans from rich relatives or friends), as it is highly unlikely that most business owners would have access to such sources nor the intended party have sufficient funds to lend.
As it has been said, advice is cheap. Many articles online and in business trade papers entitled Top Ten Alternative Business Financing Sources, include far-fetched concepts and financing ideas that are unattainable for all but a few business owners. Realistically, the most reliable and readily available sources for business funding today fall within two sectors: traditional lenders (such as banks) and alternative financing companies. We’ll touch on the difference but remember: there are many considerations when borrowing money from any source. These include a working knowledge about the type of financing, its repayment terms, and any restrictions or penalties that could be incurred if payments are not made on time.
Alternative Business Funding 101
Early we touched upon the extended time and basic requirements to obtain financing from a bank. When seeking business funding from an alternative financing source, here are some questions to ask so you’ll be better informed about an individual financing company’s financing process:
- Are there any upfront fees at the time the application is submitted?
- What documentation is required?
- What criteria do they use to make their financing decisions?
- How long it will take to learn their financing decision? Have a frank discussion at the onset to determine if your business is a strong candidate for financing and what financial information is key to their financing decision.
- Once approved, how long will you wait to receive the money?
- Are there any restrictions on how it may be used?
There are often concerns when trying something new, and that is especially true when borrowing money. If you have not had a frank discussion about your business funding requirements with a leading alternative lender such as National Business Capital, we invite you to give us a call. Our Business Consultants will gladly speak with you regarding any aspect of our financing process and will also take a personal interest in assisting you to obtain the money your business needs. You may reach us at (888) 888-9124.
Also, be sure to check out our FREE eBook on how to get business funding when banks say no: