Looking for Alternative Lending in Florida for Small Business

We live in a state with a booming population and that creates more opportunity for small business owners looking to sustain or grow their revenue. However, most business owners don't know that there are alternative lenders that could help them achieve their financial goals. Thus, they get frustrated and often fail within their first 5 years in business.

When I come in contact with some of these business owners, the responses I usually get are either "I'm good", "Not Interested", or "If I need money, I can go to my bank." It sounds easier said than done. Trust me - for the majority of business owners (especially the new ones), it is and will always be a major challenge. There are answers to those challenges, and we'll explore them in this blog. Overview of the challenges small businesses face in securing traditional loans.

Understanding Alternative Lending

Before you pass judgement on alternative lending, let's explore what it is all about and why you should consider it as an alternative to traditional lenders. To define alternative lending, it is often referred to as online or fintech lending - typically any business loan that's available through a non-bank lender. These lenders don't take deposits and operate online, using technology-first underwriting practices to expedite and expand credit access. Alternative lending has a market value of $284.5 billion and it is expected to grow rapidly in years to come to $2,541.8 million by 2030. When traditional banks decline your loan application, alternative lenders may approve your need for working capital with less stringent underwriting guidelines.

Reasons to Consider Alternative Lending

Below are reasons to consider alternative lending, especially after your bank declines your application due to insufficient collateral, your credit score not being high enough, or no skin in the game. (cash up front, assets, etc.)

• Accessibility - Easier qualification requirements compared to traditional loans. This includes an easy application process, including the lack of a need for a personal guarantee.

• Borrow a manageable amount of money without strapping your cash flow.

• Speed of funding (typically same day or within a few days) - Quicker processing and approval times, beneficial for urgent financial needs.

• Flexibility of terms - Varied repayment options that can be tailored to your business needs. This can be accomplished through daily, weekly, or monthly payments.

• Prepare for bank funding with more attractive rates and terms (including Term Loans and SBA Loans) down the road.

Types of Alternative Lending Options

• Peer-to-peer lending - Connecting borrowers directly with individual investors, usually with competitive rates.

• Online lenders - Overview of popular online lending platforms and their offerings, including SBA loans.

• Crowdfunding - Explanation of how crowdfunding works and basic platforms to consider.

• Merchant cash advances - How this option provides upfront capital based on future sales. This type of funding is designed for businesses that are unable to qualify for conventional loans or SBA loans and need access to capital as soon as possible.

• Invoice financing - Gaining access to funds based on outstanding invoices and how it works.

Evaluating Alternative Lenders

• Researching lender reputation - Importance of reviews and testimonials from other small business owners.

• Understanding fees and interest rates - Scrutinizing the total cost of borrowing, including hidden fees.

• Transparency and customer service - Evaluating how open and helpful the lender is during the application process.

Preparing Your Business for Alternative and/or Traditional Lending

• Improving your credit score - 7 steps you can take to strengthen your creditworthiness before applying.

  1. Monitor your credit report regularly to protect and improve your score.

  2. Pay your bills on time to maintain a good credit history.

  3. It is a must to manage your debt-to-credit ratio by utilizing credit responsibly.

  4. Strategically increase your credit limits to improve your creditworthiness.

  5. Separate personal and business finances to avoid negative impacts on your business credit score.

  6. Establishing trade references to enhance your creditworthiness

  7. Dispute inaccurate items as soon as possible to maintain a positive overall profile.

• Gathering necessary documentation - Essential documents to prepare for a smoother application process. The more current documentation provided, the quicker the application process.

• Developing a solid business plan - Importance of having a clear business strategy to present to potential lenders. Rather than slapping a few words together on paper, lenders want to see a detailed business plan, including an exit strategy. Most alternative lenders (example: Smart Biz Loans, ARF Financial, or On Deck Capital) do not require business plans.

Common Misconceptions about Alternative Lending

• Clarifying the risks associated with alternative lending.

• Addressing the belief that alternative lending is always more expensive.

• Alternative lending is always too risky

• Addressing the belief that alternative lending is only for businesses that can't obtain conventional loans or SBA loans. While it does open doors for businesses that are usually left out, it is not exclusive to those types of businesses. You can have near or perfect credit to obtain an alternative funding option.

  
  

Overcoming the many challenges small businesses often face, alternative lending options will help overcome those financial challenges of not knowing where to turn in case there is a need to raise funding for your project, Obtaining the right kind of funding is essential for the growth of your business. Simply put, applying for a loan is not as easy as you may think (especially an SBA Loan). There is an SBA Loan Program you may not be familiar with. If you have been in business for at least 3 years and have a minimum credit score of 660 or higher, you may have a shot at obtaining an SBA 7(a) loan from $25,000 to $350,000 through Smart Biz Loans. The best part - you are not required to put up collateral or write a business plan. This is true bank lending via online. You could also obtain a Bank Term Loan, or Line of Credit. Rather than spending a lot of time at your local bank preparing documents, only to be denied due to your credit, debt-to-income ratio, or lack of collateral, you might want to look into Smart Biz Loans as an alternative. The application process is quick and seamless. Funding usually takes 7 to 14 business days. If all fails, feel free to visit our website www.fastbizcashloans.com for more funding alternatives (regardless of credit).