After more than a decade spent revolutionizing the financing industry, alternative lending institutions are now becoming increasingly mainstream. They were earlier seen as PLAN B for desperate business owners refused by the banks, but are now becoming the first choice of SME owners who naturally think of alternative online lenders when faced with a credit crunch.
Apart from the apparent advantages of alt-fin, such as fast approval and processing, flexible funding offers, and a hassle-free approval procedure, there are many more reasons for this shift. Let’s examine –
1 – Unsecured loans – large corporations can easily find collaterals to get funding, but most small business owners don’t have this luxury. With alternative lenders, it is easier for business owners to access unsecured loans at competitive rates, even for more significant amounts.
2 – New businesses get served too – banks usually only give funding assistance to companies that have been around for a minimum of 2 years. For new businesses – even with a good credit score – it is impossible to even qualify with traditional lenders. Here alt-lenders come to the rescue.
Most, like the New York-based Mantis Funding, offer to finance companies who have been around for less than a year – they just have to prove that they have a stable revenue stream.
3 – Faster and requires almost no paperwork – even an excellent credit score is no guarantee of a quick response from the bank. This is not a problem when the requirement is not urgent, but what happens when one needs the money in just a few days?
Opportunities or challenges do come up suddenly, and for these times, the speed of service of alt-lenders can be a lifesaver for many business owners. We routinely see alt-lenders like Mantis Funding review applications and transfer merchant cash advances in 24 hours.
4 – Get funding even with existing debt – Most businesses need multiple levels of funding – a situation where owners need a fresh round of capital while still paying back an older deal is fairly common. To get added funds from a bank – even with a robust credit score and financial history – is difficult, to say the least. Most alternative lenders are not bogged down by existing debts, and as long as the business is healthy, they will offer additional capital.
5 – Access larger amounts – A common situation with a banking funding request is that most business owners don’t end up getting the amount they need. An application of $100,000 could just result in an approval for $50,000 – and that too after a long wait. Ultimately, the amount will prove to be insufficient for the purpose it was needed for. With alternative lending, owners can be fairly confident of getting the amount they truly need.
Lenders such as Mantis Funding offer a range of funding amounts bundled with different repayment criteria and timelines. For more significant amounts and long-term needs, Mantis offers a business line of credit, working capital offers, or equipment leasing/buying financing offers. For the short term, smaller needs clients can take on a straightforward merchant cash advance or short term financing.
Till recently, alternative financing offers were equated to situations where poor credit scores or lack of collateral became roadblocks for accessing capital. But the rise in applications to online lenders over the last two years shows that business owners are more open to taking advantage of the alt-lending system to overcome business liquidity crunch and to invest in growth.
Mantis Funding 