Biz Capital SBH

The Unfortunate Truth

In the past, banks have tended to perceive small businesses as higher financial risks, opting instead to provide funding to large corporations. After all, when large corporations request substantial loan amounts, it translates to more profits for the lender.

It can be incredibly challenging for aspiring entrepreneurs to secure a bank loan when they are just starting out and lack a documented history of successful sales. In addition to possessing exceptional personal and business credit, loan applicants are typically required to present evidence of steady revenue, a robust cash flow, and a few years of business operation experience. Furthermore, banks often prioritize loan applications for amounts exceeding $1 million, which is seldom necessary for smaller enterprises.



The Problem

Securing a small business loan can pose a significant challenge, particularly as banks become more stringent with their lending practices. Based on the latest Biz2Credit Small Business Lending Index™, big banks granted approval to a mere 13.5 percent of small business loan applications as of April 2023.



The Solution

So, what options are available to small businesses with innovative ideas, expansion plans, cash flow requirements, debt consolidation needs, or any other ventures, if they are unable to secure approval for a conventional loan?

Alternative Lending should be the #1  and ideal option solution for our Small Business Community!



But...What is Alternative Lending?

Alternative lending encompasses any lending practice that occurs outside the realm of conventional banking institutions. Several non-bank lenders have embraced the online platform, employing a peer-to-peer model. This innovative system, often referred to as marketplace lending, seamlessly connects ambitious business owners in need of capital with established investors who are eager to supply it.

Benefits of Alternative Lending

Alternative lending was created with the intention of providing small businesses with a simpler way to obtain capital, thus enabling them to seize more chances for expansion, job creation, and profit generation. These are the primary advantages:

•  Fast Funding

If you require funds for a down payment on a new office building, replacing damaged equipment, or restocking high-selling inventory, alternative lenders can provide a swift solution. With the ability to deliver money in just a few hours, you won't have to delay your plans or risk losing business.

• Flexibility

With alternative lenders, you have the flexibility to select from a range of financing options that perfectly suit your needs. Whether you require $10,000 to enhance your office lighting with energy-efficient solutions, wish to leverage outstanding invoices as collateral for your loan, or need $100,000 for essential building renovations, alternative lenders are here to assist you.

• Simple and Effortless Application Process

You can effortlessly upload all your information with just a few clicks, at your convenience, without any need to waste time organizing physical papers, drafting a business plan, or attending a bank meeting strictly during regular business hours.

• Higher Approval Rates

It's an irrefutable fact that an alternative lender doubles your chances of approval. Based on Biz2Credit's Small Business Lending Index for August 2018, big banks had an approval rate of approximately 26%, whereas alternative lenders boasted a significantly higher rate of 56.6%. Also, those stats only prove that it has not been a short-term tendency because small business loan approval percentages at big banks slipped again, falling from 13.8% in March to 13.5% in April of 2023, according to the latest Biz2Credit Small Business Lending Index™