Are you thinking about alternative business funding for your next expansion plan? There are plenty of reasons why alternative lenders are a great choice over traditional bank loans, especially for small businesses with demanding needs. Of course, you should never enter a lending relationship without knowing fully what you’re getting into, so don’t hesitate to call the Mulligan Funding team today to learn why alternative funding could be the solution you’ve been looking for. A one-on-one consultation with a financial expert gives you plenty of opportunity to talk about pros and cons of different loan types, and your specific financial situation.
In the meantime, there are four things you need to know about alternative financing today:
1. Business Loans Equal Growth
First and foremost, it’s all too common for business owners to see it as a shortcoming if they need help with financing. It’s time to get rid of that perception.
When you take out a business loan, you take on the capital needed to get ahead on payroll, order enough inventory, and keep your business running seamlessly through slow periods. Or maybe you find yourself able to afford your dream franchising plan for the first time, leading to opening up a second location.
Whatever your goal, the end product of the business loan is the same: success and growth. Consider a loan an investment in your business’ future and an asset to you, not an encumbrance or a sign of failure.
2. The Lending Pool is Shifting
Banks used to be the only source of small business funding. Today, alternative lenders are taking over the marketplace as business owners begin to understand the benefits of choosing this lender type over the traditional bank.
In fact, only 50 percent of today’s business loan applications are at large banks, according to Inc. A whopping 21 percent of business owners seeking funding go to alternative lenders instead, a figure that’s growing year over year.
This is likely due to banks’ rigorous restrictions and requirements, and today’s business owner’s need for flexibility. When the application process takes weeks or months and a business owner needs funding today, there’s no other option but to seek out a lender who can deliver funding fast.
With alternative lending, the benefits include:
- Quick application process
- High approval rate
- Manageable repayment terms
- Fast disbursal upon approval
As you can see, a flexible and efficient lending partner is appealing to business owners who need fast funding, as opposed to bank loans that have a lengthy and cumbersome application process fraught with rejection. Alternative financing is rapidly becoming the go-to choice for most business owners.
3. Know the Difference Between Loan Types
If you decide to go with an alternative lending partner, you’ll need to know what kind of financing you want. Two great business funding options are working capital loans and business lines of credit, and each option has its own unique benefits. Here’s a quick compare-and-contrast:
Working Capital Loans
Working capital loans offer you lump-sum capital, which you use however you see fit for renovations, expansions, cash flow, or other business expenses. The benefit is in the repayment terms: small, daily, consistent repayments that you can plan around, rather than fluctuating repayments that can mess up your cash flow as sales change.
Business Line of Credit
With a business line of credit, you’re approved for a set amount of capital. Rather than accessing the entire amount all at once, you can choose how much to access and at what rate. If you’re approved for $100,000 but need only $20,000 to complete a purchase order, that’s no problem. You only pay fees on the funds you’ve accessed, not on your entire limit. This is a great financing choice for businesses who need flexible funding access.
Not sure which type is right for you? A financing expert at Mulligan Funding is happy to talk you through your choices and help you to decide which option would serve your business better.
4. Finding the Right Lending Partner Matters
Once you’ve decided that alternative financing is right for you, it’s time to decide on the right lending partner, and a consultation is the perfect way to make this important decision. A great lending partner is willing to invest the time necessary to understand your business and help you understand the benefit of a loan, as well as figure out the right options for your particular situation. If you have any questions, they will answer them and help you to feel comfortable.
Businesses seeking funding should focus on finding a lending partner who is willing to treat you and your business like family. Financing relationships are at their most productive when they’re personal. Mulligan Funding could be the option you’re looking for: we specialize in building one-on-one, long-term relationships with small and medium-sized business owners. Your success is our success, and we’re here to help you in any way that we can.
Have questions about alternative business funding? 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 22, 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.