Alternative Financing: 4 Advantages Over Bank Loans
For the longest time, traditional bank loans have been the standard solution for business financing. In recent years, many business owners have been abandoning traditional methods, and instead are using alternative financing solutions. What advantages does alternative financing offer that traditional bank loans do not?
Alternative Financing And Debt
One major aspect of alternative financing which sets it apart from traditional bank loans is debt, or rather the lack thereof. While bank loans are debt-based, many alternative financing solutions are not. Purchase order financing, invoice factoring, merchant cash advances, and more are designed around existing or future receivables, so debt does not even enter the picture. Businesses get to preserve their credit ratings, and can reserve taking on debt for larger projects, such as mergers, acquisitions, or purchasing larger facilities.
Traditional bank loans have rigid payment schedules. No matter if a business is generating tons of revenue, or if it is going through a particularly light sales period, loan payment must be made. Unfortunately, these rigid payments can place a strain on cash flow. Many alternative financing solutions offer flexibility in payments, or do not require payments at all. Some even offer non-resource funding options, and others create revolving lines of credit, giving businesses much more leeway in how working capital is used and repaid.
Financing That Fits Your Needs
Due to the volume of requests and the red tape built into the system, many banks have a one size fits all approach to businesses. This method typically forces businesses to take on more debt than they are comfortable handling, and payments that inhibit growth. Alternative financing can be customized to fit any situation. Whether it is arranging a leasing agreement for equipment in a small office, or construction financing for building a high rise hotel from the ground up, alternative solutions can be tailored to fit any situation.
No Red Tape
As mentioned above, traditional bank loans involve a lot of red tape, which can cause delays and missed opportunities. Alternative financing removes all of that by working directly with business owners at every step of the way. Approvals and processing are handled in-house, which eliminates waiting times on both processing and disbursal of funding.
Get The Financing You Need
BG Capital Funding Group offers alternatives to traditional financing methods. Contact our offices today to learn now we can help your business.