For many business owners, securing financing can be fraught with challenges when dealing with traditional lending institutions, such as banks. However, more entrepreneurs are choosing alternative financing to launch and grow their operations because the programs are more accessible, the requirements are not a prohibitive, and – in many cases – there is no debt involved. For those still on the fence, but who are running into a web of red tape with traditional lenders, we have compiled an overview of alternative financing to show how it differs from traditional bank loans.
Banks Are Not Always The Answer
For the longest time, traditional bank loans were the answer to funding for small businesses and commercial real estate transactions. Yet since the economic downturn of 2008 banks have been increasingly employing restrictive terms and prohibitively high requirements, making it nearly impossible for a business without years of strong financials and impeccable credit to access even the most basic loans.
In response to these stringent guidelines, commercial lenders have offered alternative financing programs. These programs provide the funding entrepreneurs need, without the restrictive requirements or (in many cases) the upfront collateral needed to access financing programs. Alternative financing programs can be customized and scaled to fit your goals, as well as your credit ratings.
Alternative Financing Encourages Business Growth
Unlike traditional bank loans, alternative financing from commercial sources is designed around stimulating business growth, rather than fettering entrepreneurs with prohibitive debt and payment schedules. Many alternative financing solution do not even place debt on the balance sheets, such as accounts receivable and purchase order financing. Others, such as merchant cash advances, offer flexibility to business owners so they are not strapped to a rigid payment schedule, regardless of revenue. These and other alternative financing solutions allow businesses to expand and carve out a much larger market share for themselves than with traditional loans.
Learn More Today
If you own a business, or are looking to invest in commercial real estate, and banks are not in the picture, Lavan Financial Group has a wide array of commercial financing programs to fit any industry. Call our offices at 203-308-4547 and let our team work with you to find the best solution to help you reach your goals.