Gone are the days when you had to walk up to your local bank to get a small business loan. Even though this is an option for those looking for alternate business loans, it can be quite confusing and risky at the same time. We have for you a list of top alternative lenders to make it convenient for you to choose the right lender for your small businesses and startups.
Before we give you the list of top alternative lenders, let us get into detail and see what exactly are alternate lenders.
What Is An Alternative Lender?
Getting finance for your small business is always a challenge. It is difficult for small business owners to find working capital and other types of small business loans.
Apart from credit concerns, lack of collateral is responsible for applicants not qualifying for traditional loans. If this is not enough, the whole process of seeking and then applying for business or equipment loans can be pretty frustrating. It is worse for business owners who have a bad credit history.
This is where alternative lending comes in. Listed below are top alternative lenders for small businesses:
OnDeck, launched in the year 2007 offers short as well as long-term loans. While the short-term loan amount is up to $250,000, the long-term loan amount offered is up to $100,000 in flexible cash.
OnDeck is a great option for those who do not have high credit scores. Further, its application process takes not more than 10 minutes. You can receive funding in just 24 hours.
Talking about its disadvantages, OnDeck does not offer unsecured loans. A general lien is placed on the business’ assets when a company owner takes a term loan from OnDeck. He or she must also provide a personal guarantee for the loan.
In order to qualify, the business must be up and running for at least a year, must have a 500+ credit score with annual revenue of more than $100,000 in the previous 12 months.
Kabbage provides small loans that are payable over six months. The usual line of credit is between $2000 and $100,000.
The loan approval system in Kabbage is different from traditional lenders since it takes into account real-life data and not just the credit score. The approval system in Kabbage is very transparent and very quick (a few minutes to be accurate).
It is important to remember that the loan amount has to be paid back within six months of taking the loan. You need to be running the business for at least a year to be eligible. Moreover, the company must make more than $50,000 a year in revenue. Kabbage has till dated funded small businesses with over $1 billion.
SnapCap offers merchant or unsecured loans of between $5,000 and $600,000 to small businesses. While traditional lending demands collateral, an unsecured loan uses many factors to judge a loan application, which might include your credit score as well as sales performance.
The lending process in SnapCap is fairly simple with a turnaround time of 48 hours. It also offers highly competitive short-term loan options.
In order to qualify for Snapcap loans, you will be asked questions about your business, industry and the revenue generated in the past years.
RapidAdvance is best suited for businesses that either does not want or cannot qualify for a traditional loan. The funds can be used to renovate, expand or even reduce debt.
The application process of RapidAdvance is simple and very quick. Based on the inputs that you provide them after meeting them for the first time, you will be provided with a preliminary funding amount. If the estimate is correct, you will have to provide more information about your business. It takes 24 hours for the approval process and you get the funds within three working days.
One of the main drawbacks while working with RapidAdvance is that it does not work with online businesses, and also does not offer prepayment discounts, unlike other lenders.
You must have a physical location to be eligible for the loan, and must also be operational for at least three months. It must earn at least $2,500 a month in Visa and MasterCard receivables. It is essential to have at least one year left on your lease.
Fundation provides conventional business loans for up to $500,000. The process of an online application takes not more than 10 minutes. This is quickly followed by initial credit analysis to make sure whether you are fit enough for the loan.
After the application is approved, it takes three business days for the amount to be transferred to your account.
It is necessary to warn you here that if your company has been running for over two years and still does not generate at least $100,000 a year, your application is likely to be rejected. Further, you must have at least three employees and good personal credit.
The five top alternative lenders for small businesses mentioned above is just a click away if you do not qualify for traditional loans.