The strategy you employ to obtain financing for your business should mirror your growth strategy. If you have plans of quickly scaling your business in the next few years, it is imperative that you go for a relatively speedy financing solution, such as business loans from alternative financiers rather than traditional banks.
The following are some of the benefits that alternative financiers offer to small business owners looking to accelerate the growth of their enterprises.
Young businesses are not locked out of funding
Obtaining traditional loans from banks can be quite difficult for young businesses, especially if you haven’t been in operation for many years and don’t have a positive cash flow. The good news for new business owners is that alternative financiers typically offer loan facilities to businesses much earlier in the business lifecycle compared to mainstream, traditional banks.
You need not give up too much equity
A vast majority of businesspeople tend to make the mistake of retaining too little equity early on in their business. Experts have repeatedly pointed out that it may not be wise to give out too large a share of your business to investors.
Admittedly, a large slice of the ownership pie is usually the cost of receiving aid from investors. But with alternative lenders such as libertylending.com, you don’t have to give away too much.
Quick access to the funds
Time is an invaluable commodity, meaning you can’t afford to wait several months to find out if a bank has approved your loan, or spend equally long trying to persuade potential investors. Speedy financing is among the top benefits of alternative finance solutions. In addition to being easy to apply for, loans are also released quickly, and you can avoid falling into cash flow traps.
Used wisely, alternative business loans enable you to invest in resources that facilitate quick and steady growth of your business. Whether you need funds for boosting production, engineering strategic partnerships, or conducting research and development, alternative financing enable you to steer clear of cash flow problems that typically plague small businesses that spend large amounts of operating cash on such strategic investments.
Option of increasing the size of the loan
If your business is gearing up for growth and you’re planning to bolster operations, you can be sure that your operating cash will begin dwindling fast. To prepare your business for the cash flow problems that typically accompany rapid growth, you can request your alternative business loan provider to quickly increase your line of credit in order to access the required cash.
Less restrictive capital requirements
To obtain institutional funds from traditional banks, you are usually required to put up business assets and even personal assets as collateral for the loan. In the event that you default on your loan payments, you stand to lose your home, vehicles, and personal savings.
Alternative financiers don’t usually set stringent collateral requirements. This is especially advantageous if you’re running a modestly sized family-owned business that is still in the infancy stages of growth.