This post is a revised version of an article originally published on Forbes by National’s CEO, Joe Camberato. To view the original article, click here.
Whether you’re working through a difficult stretch or gearing up to take on a new opportunity, the biggest challenge you face as a small business owner is probably obtaining capital. Fintech lending, also called alternative lending, has helped simplify and streamline this process, giving small business owners new options.
In years past, getting capital meant going to the bank, applying for a small business loan, and receiving funding in a few weeks or months.
But with today’s fast-moving business world, waiting more than a week isn’t a realistic option. Most business owners need funding to pursue new opportunities right away.
In recent years, the fintech lending industry has gained momentum. Now, many emerging fintech companies can provide small businesses with the same resources that, initially, only traditional banks held. Specifically, they can also provide SBA (Small Business Administration) loans.
But instead of sky-high credit standards, or demanding collateral, fintech companies focus on the potential a small business holds for the future.
If you’re seeking capital to grow or resolve challenges, then the fintech lending process may be confusing—at first. However, with fewer regulations and dedicated advisors, the overall time to funding is much faster, and requires far less documentation.
If this is your first time taking advantage of fintech lending, here’s what you need to know.
Life moves faster today, and the business world is no different. If you need funding for your small business, then you probably need it right away. Fintech lending can help you accomplish that.
At a bank, you’d have to wait around while your application is considered. Even with perfect credit, there’s rarely a fast-track to receiving financing. And, a seemingly perfect application could still result in a rejection. From start to finish, this period could last between weeks and months.
Through taking advantage of the fintech lending market, you can receive your options in just minutes. Often, you can receive funding on the same day (at National, we can get your business funded in just a few hours).
With speed on your side, you have the ability to quickly decide how to proceed.
While waiting to hear about your bank loan application can be exhausting, applying can also be a nightmare.
Banks generally request the full nine when it comes to documents. From profit/loss statements, to balance sheets, and even personal financial statements, you’ll have to provide everything. Just gathering updated documents can take hours of your time.
In the small business lending fintech world, though, the process is easier and more straightforward.
Most small business lending fintech marketplaces will request only the essentials. You’ll generally receive a pre-approval based on your credit score and annual sales. Then, lenders may confirm your financials based on bank statements and tax returns.
Larger requests and economic downturns may cause banks to request even more documentation. However, this is on an as-needed basis only.
When financial technology companies first hit the scene, many business owners were skeptical. After all, with the faster approval timelines came a disadvantage: higher interest rates. As fintech companies have evolved and become mainstream, though, this interest rate gap has disappeared.
Now, fintech companies offer competitive market rates for highly desirable financing programs. When you consider the new opportunities you can pursue, it’s even less significant.
In addition to challenging credit histories, collateral requirements often prevent small businesses from qualifying for bank loans. This is especially true when the amount requested is above $100K.
Even if they’re applying for working capital, many small business owners don’t have collateral (like real estate, business assets or personal property) to put up. But with fintech marketplace lending, collateral requirements aren’t a limitation.
Generally, fintech lending platforms offer programs in which you can qualify for financing without hard assets. That being said, putting down collateral may help you qualify for higher amounts or better terms.
You’re probably focused on obtaining financing now, but remember: your business may need funding again in the future. For time-strapped business owners, another huge advantage of fintech lending is the simplicity of additional fundings.
When you work with a fintech lender, you’re starting a relationship. If you make payments on time, then you may have an easier time qualifying next time you’re in need of financing.
With banks, you won’t receive the same treatment. Even if you’ve paid off two bank loans in full, you’ll have to apply through the normal process. Banks don’t offer a quick, simple and easy process for previous clients to receive new financing as they come across new needs.
Fintech commercial lending companies, on the other hand, will provide you with your new options right away. After receiving them, you have the choice to accept or decline the offer.
Why wait for bank financing options when you don’t have to?
At National, we know that speed and simplicity are the name of the game when it comes to getting your business financed. As experts in both fintech and lending, you can get your business financing while knowing that you’re taking the right steps forward.
Through our 75+ lender marketplace, we can help you obtain the best financing rates, terms and amounts.
Once you apply, you can get your financing options in minutes, and your business funded in just a few hours.
Apply now to get the ball rolling and learn what you can qualify for!
National Business Capital helps entrepreneurs secure quick and fair financing to save time and cultivate sustainable growth.
Our stress-free online platform is designed for simplicity and speed, helping business owners go from application to approval in a matter of hours. And while we remain a leader in the Fintech industry, our clients agree it’s our personalized service and award-winning team that sets us apart.
From SBA loans to lines of credit, to equipment financing, and more, business owners can access all the different financing programs available to them in one place. Through our streamlined process, we have helped clients secure $2 billion in financing since 2007, and, more importantly, we’ve helped entrepreneurs save a tremendous amount of time and grow faster.
Joseph Camberato, CEO of National Business Capital, developed a passion for business at a young age. Joe started his company in 2007 in his spare bedroom and has grown to secure over $1 Billion dollars in financing for small business owners nationwide. National’s team has an amazing culture and has been name the #1 Top Workplace on Long Island 3 years in a row and counting. Joe is a trusted financial expert who’s published more than 2,000 articles in the last 3 years. His articles have generated over 5 million page views and has been featured on blogs such as Google News, Yahoo, CNBC, Forbes Magazine, etc. His passion has also inspired him to build the "GrowByJoe” YouTube channel where he shares his insights into small business trends and tips for growth. Joe also holds a seat on Forbes Finance Council and is an active member of the Young Presidents' Organization (YPO), a global leadership community.