Alternative lending is gaining popularity among small business owners, a recent report by Best Cash Advance found, particularly because these payment options are less stringent than the ones offered by banks.
For example, many alternative short term lenders offer cash advances to small businesses that may not have been approved by a bank or financial institution. Ami Kassar, CEO of small business loan adviser firm MultiFunding, said that cash-flow lenders generally offer advances that go as high as $150,000. According to the study, alternative lending accounted for 65 percent of all small business loans in 2012. In a recent blog for Fox Business, Rohit Arora, CEO of Biz2Credit, highlighted some of the reasons alternative lending has rapidly gained popularity: - Speed: Sometimes small business owners need a large sum of money quickly, which alternative lenders are capable of providing. Banks, on the other hand, generally take weeks or months to respond to even small loan requests. - Flexibility: Alternative lenders offer loans for a variety of reasons and would be more likely to offer an advance to startups. In addition, they are more likely to overlook something like a poor credit score. - Technological capabilities: Because most companies, including small businesses, have online accounting programs, lenders can track their financial progress more easily.