You probably wouldn’t call your business a “cookie cutter” entity. As such, you may need a small business loan that doesn’t follow the traditional loan pathway. Sometimes businesses need a loan that is as innovative as they are to fuel growth, expand operations, and navigate the unexpected. That’s where alternative lending solutions come into play, such as a Merchant Cash Advance from New Bridge Merchant Capital. Let’s take a look at some of the options your business can choose that isn’t a traditional term loan.
Overview of Alternative Loan Options
| Financing Solution | Description |
| Merchant Cash Advances | Provides upfront capital in exchange for a percentage of future credit card sales, ideal for businesses with fluctuating revenue streams, offering flexible repayment and quick access to funds. |
| Business Line of Credit | Offers a revolving credit facility, allowing businesses to access funds as needed, suitable for managing short-term cash flow needs and seizing growth opportunities. |
| Peer-to-Peer (P2P) Lending | Connects borrowers directly with individual investors, offering competitive rates and flexible terms, particularly beneficial for startups and small businesses with limited credit history. |
| Crowdfunding | Enables businesses to raise capital from a broad audience through online campaigns, fostering growth and expansion without traditional lenders or investors. |
| Invoice Financing | Allows businesses to access immediate funding by unlocking the value of unpaid invoices, improving cash flow and funding growth initiatives without additional debt. |
| Corporate Venture Capital | Provides startups with financial resources, industry expertise, and market networks from established corporations, offering significant benefits for small businesses seeking growth opportunities. |
Merchant Cash Advances
Merchant Cash Advances (MCAs) provide businesses with upfront capital in exchange for a percentage of future credit card sales. Unlike traditional loans, MCAs offer flexibility in repayment, where businesses repay the advance through a predetermined percentage of their daily credit card transactions. This financing option is particularly advantageous for businesses with fluctuating revenue streams or seasonal fluctuations, as it allows them to manage cash flow effectively during slow periods without the pressure of fixed monthly payments. MCAs offer quick access to funds and require minimal paperwork, making them an attractive option for businesses in need of immediate capital.
Business Line of Credit
A business Line of Credit (LOC) offers businesses a revolving credit facility, allowing them to access funds up to a predetermined limit as needed. Unlike traditional term loans, where businesses receive a lump sum upfront, LOCs provide flexibility in borrowing, enabling businesses to draw funds only when required. This makes them an excellent choice for managing short-term cash flow needs, covering unexpected expenses, or seizing growth opportunities. With a business line of credit, businesses have the flexibility to borrow and repay funds multiple times, making it a versatile financing solution for various business needs.
Peer-to-Peer (P2P) Lending
Peer-to-Peer (P2P) Lending platforms connect borrowers directly with individual investors willing to lend money. This alternative lending model eliminates the need for traditional financial institutions, offering borrowers competitive interest rates and flexible repayment terms. P2P lending is particularly beneficial for businesses that may not qualify for traditional bank loans due to limited credit history or other factors. By leveraging the power of technology and online platforms, P2P lending provides businesses with access to capital in a streamlined and efficient manner, making it an attractive financing option for startups and small businesses.
Crowdfunding
Another option that has become quite popular in recent years is crowdfunding. Crowdfunding platforms enable businesses to raise capital from a large number of individuals or investors through online campaigns. This innovative financing model leverages the collective power of the crowd to fund projects, product launches, or business expansions.
Crowdfunding offers businesses access to capital without the need for traditional lenders or investors, making it an ideal option for startups and innovative ventures. By showcasing their ideas or products to a broad audience, businesses can attract funding and generate buzz, creating opportunities for growth and expansion.
Invoice Financing
Invoice Financing, also known as accounts receivable financing, allows businesses to unlock the value of unpaid invoices to access immediate funding. Instead of waiting for customers to pay outstanding invoices, businesses can sell them to a third-party lender at a discount in exchange for upfront cash. Invoice financing helps businesses improve cash flow, bridge gaps in revenue, and fund growth initiatives without taking on additional debt. By converting accounts receivable into working capital, businesses can accelerate cash flow and seize opportunities for expansion or investment.
Corporate Venture Capital (CVC)
Here is an alternative solution you may not have considered: Corporate Venture Capital. This is a kind of investment that established corporations provide startups. Unlike traditional venture capital firms, which are independent entities, corporate venture capital arms are funded by and affiliated with established corporations. CVC provides startups with not only financial resources but also access to the corporate partner’s industry expertise, resources, and market networks.
Additionally, for small businesses, partnering with a corporate venture capital firm can offer significant benefits, including financial support, guidance, and potential access to new markets or distribution channels.
Why Consider Alternative Lending Options?
When compared to the term loans available from a bank, alternative lending options offer several advantages, including:
Accessibility
Alternative lending options are often more accessible to businesses with less-than-perfect credit histories or limited collateral. Traditional banks may have stringent eligibility criteria, making it challenging for some businesses to qualify for loans. Alternative lenders, on the other hand, may have more flexible requirements, allowing a wider range of businesses to access financing.
Speed
Alternative lending processes are typically faster than traditional bank loans. While bank loans may involve lengthy application processes and approval timelines, alternative lenders often offer quick and streamlined application processes, with funding disbursed in days rather than weeks or months. This speed can be crucial for businesses facing urgent financial needs or opportunities.
Flexibility
Alternative lending options often provide more flexibility in terms of loan structures, repayment terms, and use of funds. Businesses can choose from a variety of financing products tailored to their specific needs, such as merchant cash advances, lines of credit, or invoice financing. Additionally, alternative lenders may be more willing to negotiate terms and customize solutions to meet individual business requirements.
Looking for Alternative Lending Solutions? Contact NBMC Today!
For small businesses that may not meet the criteria of more traditional loan options, alternative loans from online lenders like New Bridge Merchant Capital can make all the difference in the world. Whether you are looking for a more flexible term loan, a Merchant Cash Advance, or a Line of Credit, we’ve got you covered. Our team of experts is committed to helping you find the right financing solution to meet your unique business needs. Contact us today at 844-228-0593 or by filling out the online form. It’s time to explore NBMC’s alternative lending options and take your business to the next level.
