Alternative lending is always an option if you need an extra influx of cash to your business. Your choices include crowdfunding, and private or marketplace lending. Read on for more information about alternative lending and how your business can benefit from it.
An Overview of Alternate Lending
A growing number of businesses are deciding that traditional loans are not for them. There are a few reasons why alternative lending is becoming the default choice for borrowing money. One of them is the flexibility it gives you. Finding the right type of loan for a small business is trickier than finding one for a large corporation. But alternate lending allows you to tailor your loan to your business’s needs, so you’re not getting in over your head.
Explaining The Types Of Alternate Lending
When it comes to crowdfunding, this is your best choice if you are just starting your small business. You’ll need to decide exactly how much cash is necessary to get your business off the ground. The idea is to then execute a marketing campaign that encourages the people who will benefit from your business to support it in its early days. It is the trickiest type of alternate lending because its success depends on how much money your supporters are willing to donate.
When it comes to private lending, the party that is the lender supplies you with the cash themselves. They don’t need investors to pony up the money for them. What this means for your business is that you’ll have the flexibility to take a low value loan that a bank may not be willing to issue because the amount is too small.
Marketplace lending, otherwise known as peer-to-peer lending, brings business owners and investors together in a way that no bank ever would. Marketplace lenders earn a commission every time they help an investor connect with a business owner that needs the money to pay for operations. This type of loan is your best bet if your credit is good.
For more information on alternative lending, please contact Spearing Capital & Consulting, Inc.