3 Alternatives Financing for Small Businesses (Part 1)

Starting your own company can be a daunting but rewarding process. While a great business plan is crucial for founders, financing is one of the most important elements a company needs to succeed.

However, financing a startup or small business can be a difficult, drawn-out process, especially for those with poor credit. While there is no minimum credit score you must have to get a business loan, traditional lenders have a range they usually consider acceptable.

In this article, we break down 11 small business funding options, examine the benefits of alternative lending and provide tips on how to finance your business.

What is Alternative Financing?
Alternative financing is any method through which business owners can acquire capital without the assistance of traditional banks. Generally, if a funding option is based entirely online, it is an alternative financing method. By this definition, options such as crowdfunding, online loan providers and cryptocurrency qualify as alternative financing.

Easier qualification: Not all small business owners meet the additional requirements to apply and be approved for traditional loans. In these cases, business loan alternatives are helpful.
Faster approval: Traditional bank loans can take weeks to be approved, whereas some business loan alternatives give you access to funding in as little as one week.

Business financing options without a traditional bank
If your small business needs capital but doesn’t qualify for a traditional bank loan, certain alternative financing methods and lenders may meet your needs.

What is Alternative Financing?
Alternative financing is any method through which business owners can acquire capital without the assistance of traditional banks. Generally, if a funding option is based entirely online, it is an alternative financing method. By this definition, options such as crowdfunding, online loan providers and cryptocurrency qualify as alternative financing.

Why might Small Businesses seek Alternative Financing?
There are several reasons why small business owners might turn to business loan alternatives. Here are three of the most common.

Lower credit requirements: Traditional banks are almost certain to decline loans to borrowers with credit scores below a certain threshold.


Easier qualification: Not all small business owners meet the additional requirements to apply and be approved for traditional loans. In these cases, business loan alternatives are helpful.
Faster approval: Traditional bank loans can take weeks to be approved, whereas some business loan alternatives give you access to funding in as little as one week.

Business financing options without a traditional bank
If your small business needs capital but doesn’t qualify for a traditional bank loan, certain alternative financing methods and lenders may meet your needs.

Watch out for Series 2 of this Article Titled: 3 Top Financing Options for Startups and Small Businesses.

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