Business Financing vs. Bank Loans

Last Updated on March 16, 2016

To begin a discussion of business financing versus traditional bank loans, let’s define the two terms.

Financing a business is the process of bringing money into a company. Usually this means taking on debt to secure this financing and by taking advantage of credit arrangements.

Read on to learn the major differences between alternative business financing, and traditional bank financing

Business Financing vs. Bank Loans: Major Differences

Bank loans are one specific way for business owners to obtain additional working capital. While the term business financing can mean the same thing as obtaining a bank loan, generally it implies seeking the money from a non-traditional source, such as an alternative financing company.

Bank loans and loans from credit unions are structured according to the financial history and reputation of the borrower. Business owners with large, long-established enterprises and years in business who have high FICO scores still face challenges.

The same will be true for small business owners seeking working capital for their companies, especially those that have not been in business for a long time.

Time & Approval Factors When Obtaining a Bank Loan

Another key factor when seeking money from a traditional bank or financier is time. Even with perfect credit and if approved, the time-frame from application to when the money is made available to borrowers can take several months.

Fortunately, this is not the case with alternative financing companies. In this financing sector the process is greatly simplified and there is a much shorter time-frame for when funds are made available to borrowers.

Alternative financing underwriting criteria is also more reasonable than banks’ loan decision criteria as well, which accounts for National’s approval rate of over 90%, compared to a bank’s 18% average rate of approval.

More Information On Alternative Financing

National Business Capital is a leading alternative financing company that assists business owners obtain the working capital their company requires.

Our Business Consultants will work with business financing applicants with any size business in any industry. For more information regarding our services please call us at (877) 482-3008.

Or, apply for alternative business financing today by filling out a 1-minute application online, and get the business loan or credit line you need in as little as 24 hours.

National Business Capital is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!


About the Author, Megan Capobianco

Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.