If you own a small business and have trouble getting financing from a bank, you’re not alone. Banks are becoming more willing to lend to small businesses, but they’re still generally hesitant to do so.
A post at Bloomberg Businessweek, tells the story in plain words: “The void in bank lending has spurred the growth of alternative lending.”
Alternative business loans offer flexible fixed daily payments, giving you access to the funds you need now, while planning for the future. This type of financing also provides flexible loan amounts, and fewer restrictions on how funds are used. Because the main advantages of alternative lending are easy and fast access, they make the perfect solution for many small businesses. That even includes micro-small businesses that do less than $100,000 annually in revenues.
What each alternative lender requires to access financing differs, but here are some general guidelines to give you an idea of what you might need to qualify:
- You must have been in business for a specified period of time – usually a year. If you can make it the first year, your odds of succeeding increase dramatically. There’s much debate about the small business failure rate. Although dated, this blog post shows 25% of small businesses fail within the first year. The data originally comes from research done by the Small Business Administration. The failure rate varies greatly by industry – 25% is an overall average.
Generally, though, you must have been operating for at least a year before you can access alternative financing.
- Do an average of $10,000 in monthly revenues. If you can do this much consistently, generally you can support employing at least yourself. It makes you stable enough to be worth the risk for an alternative lender.
- No open bankruptcies. What lender would want to help a business in the middle of a bankruptcy? At best, bankruptcy is a sign you’re reorganizing your debt so you can get a fresh start and continue forward with your business. At worst, it’s time to admit your business has failed and move on to the next idea. Prior bankruptcies are usually okay for alternative lenders, but you should make sure your business is operating as stably as possible now if you have a bankruptcy in your past.
If you meet those simple qualifications, you’ll generally qualify for alternative lending.
At Reliant Funding, we are an alternative lender that gets you up to $500,000 per location, often in as little as 3 business days. And no collateral is required.
Call our alternative lending specialists at 877.850.0998 or contact us online to learn how your business can access the financing it needs to grow.