With the change in markets and limited access to quick and easy funding; it has become almost imperative for small business owners to find alternative methods of financing. For people with small businesses, access to mainstream financing from banks has become limited and very strict. Therefore it is important for business owners to look into the following business financing alternatives.
Peer to Peer Lending
The first alternative to consider is peer-to-peer lending. In this method of financing, one is able to obtain funding from people who they are not related to and do not have to go through the intermediary institutions like banks or other financial institutions.
The lending takes place online through platforms and also has tools for checking personal credit. Although this type of funding is for individuals rather than businesses so no business credit checks are done; it does have favorable rates. The interest rates for this type of lending is set by the lenders who are in competition in order to get the maximum benefit or can be fixed by an intermediary after having analyzed the borrower’s credit rating.
In peer to peer lending, the lenders are the ones who choose who they can invest in. This type of loan is unsecured and is not protected by government insurance. It also provides the person looking for the funding with a number of investors who are able to provide a loan that suits them. Like any other model of funding, a borrower will be required to submit their personal information and credit information in order for lenders to conduct a complete review.
This type of funding has several advantages, one of them being the low rate of interest that it provides. The rates are usually lower than traditional bank rates mostly below 10%. The rates are also less volatile than rates provided by other financial institutions
Another alternative method of business funding is a payday loan. This type of loan is based on using your monthly paycheck as the collateral or security for the loan. This type of loan may be beneficial if you work and have a pay stub at the end of the month. All one has to do is look for a company that offers a payday loan online, apply and wait for the response.
Payday loans will also require one to provide their personal information and income verification. Regardless of your credit rating they will find a plan that suits you and offer a loan that you can use for your business. You will need to compare the rates of different companies or platforms offering payday loans before you settle on one. This method is favorable as it takes a short time before the loan is approved and the turnover time for the loan is very short. It is also possible to retract from a particular provider as long as you cancel before the money is deposited into your bank account.
Payday loans are a simple an alternative method for getting access to fast cash, especially if a business owner has a low credit rating or is in an urgent situation and needs the money as soon as possible for the business.
So if you were looking for business financing alternatives that are readily available for you online consider peer to peer lending or a payday loan. While there are many other types of fast business funding you can be sure that with these two options you will get access to cash fast without the headaches that come with banks and mainstream methods of financing. These methods of funding are flexible and may be more suitable especially if you have a small growing business with limited options.