Feb 18, 2013 Sean Albert
Alternative financing has been a crucial component of the economic recovery, as traditional lending tightened to the point of near inaccessibility following the recession, especially for businesses. As these services come with a variety of perks and benefits for businesses and consumers, the sector has experienced massive growth for several reasons.
Insider Media recently reported that one expert, Nick Dodd, believes that small and medium-sized businesses (SMBs) have been the biggest beneficiaries of increased availability of alternative lending. While traditional lenders have become more active in the past year, disbursing higher loan volumes than the previous three years, there are still a variety of factors holding these financial institutions back from meeting the massive demand.
According to the news provider, Dodd said that SMB owners might be using alternative financial services as a method of avoiding not relying too much on one source of loans, which is more common in the traditional lending sector.
"In the mid-market and SMB segments, invoice finance and asset based lending are enjoying a renaissance," Dodd explained, according to Insider Media. "They're flexible, particularly suited to those with large asset bases and, crucially for SMBs, the capital they release grows in-line with sales."
Finally, the source noted that Dodd asserts the lending market will continue to become more robust in the coming years, and SMBs, as well as other firms and consumers, will have a greater variety of options with competitive rates as a result.
SMB owners should always conduct adequate assessments and research regarding the best possible lending products for their specific needs, as there are an endless variety of options for financing today. Alternative lending is best served for companies that need money quickly, efficiently and without long application processes, and are especially useful when traditional avenues are not possible.