Retail Financing: What is the Difference Between Traditional Business Funding and Alternative Business Funding

One of the most common questions small and mid-sized retail business owners as us to explain is the difference between traditional business funding options (e.g. banks and credit unions) and alternative business funding from sources like Mulligan Funding. We’re happy to answer every question posed to us, but we must admit that this is among our favorites – because the differences between the two options may be surprising and eye-opening.

The simplest way to highlight the advantages of alternative business funding for a retail business is to compare key five elements: application, approval, collateral, control, and repayment.


Some traditional business lenders may have an application process that involves multiple documents, including: business plans, personal and business credit scores, at least two years of financial statements, tax returns, and even a comprehensive and updated resume. As can be imagined, collecting, updating, submitting and often re-submitting these documents (because they may not be deemed complete or correct) can oftentimes be time-consuming, and can be costly as well.

Many alternative business funding sources like Mulligan Funding, work to streamline the application process by using a seamless application that can be filled out online at any time (e.g. business owners can do it when they aren’t running their business, which is usually very early in the morning or late in the evening). Although some of the processes and required documents may be similar to traditional lenders, only a small number of simple supporting documents are typically required, such as a few months of business bank statements, and a cost-benefit analysis to get a sense of monthly average cash flow.


Some traditional lenders may take months to evaluate a loan, and it’s not uncommon for multiple people to assess a single application (or at least have it on their desk!) at one point or another during the process. Furthermore, applicants’ business and personal credit scores may be held to a high standard and applicants typically need at least two years of business financial statements.

Alternative funding partners such as Mulligan Funding take a different approach to their business review process. Loan applications are assessed in as soon as a few hours*. And upon approval, funds are deposited into the applicants’ account as soon as the business day after approval*.


Traditional business lenders may often ask that business financial loans are backed by collateral, such as equipment, properties, vehicles, etc. Without enough collateral, the loan may not be approved.

Alternative funding providers don’t necessarily require collateral to be assigned to the loan. This helps strengthen a business’s balance sheet. It also gives business owners the freedom to liquidate an asset (e.g. equipment, vehicles, etc.) if they find it profitable, desirable or necessary to do so. You can use the proceeds of alternative business funding any way you choose1.


Traditional business lenders may impose restrictions on how business owners can use the loan. For example, if the application noted that the business financing would be used to purchase inventory, then that’s how the money must be spent. Depending on each business owner’s unique needs, these specifications may or may not limit the owners’ uses for the funds.

Our alternative business funding approach allows you to decide how a business should spend its working capital1! This is particularly valuable if a golden opportunity arises, such as the chance to reel in a huge customer, or win a lucrative project bid.


When it comes to paying back a loan, some traditional business lenders prefer borrowers to follow their repayment schedule rather than repaying the loan earlier. This is because their profit is based on collecting at least 100% of the anticipated interest.

Once again, alternative funding sources like Mulligan, take a different approach. While prepayment is optional (i.e. there’s no requirement or even request), business owners who find themselves in a position to pay back their loan earlier than scheduled can do so, and reduce their interest costs in the process.

The Bottom-Line 

Alternative lenders offer advantages to retail business owners that traditional business lenders can’t, so make sure to consider all your options before committing yourself and your business.

Call Mulligan Funding at 855-326-3564 to discuss your financing options today!

The information shared is intended to be used for informational purposes only and you should independently research and verify.

Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.