Alternative Lending: The Truth
It’s no secret that securing financing for your business can be tricky and downright scary at times. You may have visions of tall, intimidating buildings housing banks that are unwilling to lend money for your new business and growing success. You may also envision a private lender that requires high interest rates and fees you may not be able to afford. While these images may be far from reality, it is often true that myths and stigmas exist about lending entities that may make you a little leery about both traditional and alternative lending. Here a few common myths and truths that should make finding lending options easier.
One myth is that a new business will never get financed. Before you lose hope or try some desperate method of making money, you should know that there are options for you. You may simply not have a business credit score yet, but lenders can look more at your personal credit history than they would for established businesses. Interest rates may be a little higher for you, but it is usually very possible for you to get the money you need for startup costs.
You may think that the approval process for loans takes so long that by the time you’ll get the money, you could have made the money yourself. This may have been true in the past, but it is usually not the case now. With advances in technology, the approval process can be done through specialized software, cutting the approval time down drastically.
If you’re thinking about alternative lending options, you may be afraid that there are not many options available for business people like you. The truth is, however, that there are probably more reputable lenders are eager to help you than ever before. If your business succeeds, and they likely want it to, they can make their money back. Some financing options are even easier to get approval for because these lenders typically look at more than just credit scores.
When it comes to business loans, it’s wise to be cautious and to be sure to know exactly what you’re agreeing to. Make sure you do the necessary research and have a plan to pay the loan back as quickly as possible. Alternative lending can be a good financing option for any small business, established or not. Try not to let the myths surrounding these types of loans scare you out of something that could end up making your business succeed and thrive.