Can Your Business Benefit From Small Business Financing?

Most people with any business experience at all will tell you that the one thing you can almost always count on in the world of business is rapid and unpredictable change. The landscape of commerce tends to continually shifts and is as likely to be driven by the changing whims of consumers as the unseen tectonic shifts of macroeconomics. The next hot selling item or the next big financial setback facing your company are each probably just about as likely to occur as the other. What smart business people will usually agree to, however, is that while you cannot predict every possible circumstance your business will encounter, you should be ready to react to the unexpected with deftness and speed. While traditional lending institutions are probably not associated with being either nimble or fleet of foot, some companies that specialize in alternative financing are possibly beginning to fit that description.


The proper reaction to any situation in business usually revolves around having enough available capital on hand to take advantage of an opportunity that springs up overnight or to bounce back from a quick-striking disaster. The world of business usually moves at a rapid pace, and most opportunities or problems are rarely willing to wait around while a traditional lender takes weeks, or possibly longer, to give you an answer. Many alternative lenders pride themselves on a quick turnaround on loan applications, sometimes providing an answer in less than a day.


In addition to usually providing greater speed, alternative financing can possibly better match the amount of money your small business needs. Typical commercial lenders only profit from making large loans, so naturally, they tend to approve those more readily. However, small businesses sometimes just need a smaller amount to grab a bargain, expand a service or cover a loss. An alternative lending firm may be able to better meet a small business’ needs with these smaller loans.


Sometimes an alternative financing solution can work with a small business on unproven ideas since they are generally more willing to assume greater risks than traditional banks. As long as the small business owner has good personal credit and the business’ credit is solid, nontraditional lenders can possibly work with some unknown risk factors. Keep in mind that all this speed and flexibility usually comes with the price of higher interest rates and less favorable fee structures. Even with this possible caveat, alternative financing could be beneficial to your small business in some situations since the higher cost of the loan could be more than offset by the opportunity the funding provides or the setback the loan might help you overcome.

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