The need to raise cash may arise frequently when operating a small business — both at the outset, and over the course of a given company’s lifespan. Sometime it is an issue of cash flow, sometimes it is costs around expansion adding up, and other times it may be the result of a temporary downturn. Whatever your particular situation, having a comprehensive understanding of potential financing options is essential.

That understanding should include alternative lending. These options, while less standard than typical commercial loans, can be useful assets in tough times. Read on to learn a little more about why.

Less Documentation, Less Time To Secure

A significant virtue of alternative loans is that they tend to be less stringent in lending criteria than typical loans. Naturally, this can be a concern: lenders that fail to properly evaluate borrowers may be concerning for any number of reasons, and quick loans often carry high interest rates. This is certainly worth considering when evaluating any financing options.

Still, plenty of alternative lending options are easier to secure, for justifiable reasons, and may be worth pursuing. An asset-based loan, for instance, can be a useful way to raise quick cash by putting some item you own up for collateral, and securing funding immediately. Other options, like private personal loans, can be negotiated individually with a lender, potentially allowing for more leeway in terms of rates and terms.

More Options

Another virtue of alternative lending is the vast number of options available for raising cash. There are simply many types of financing that constitute “alternative” forms of lending, making it fairly likely you can secure funding appropriate to your situation, even with a limited business history.

Aside from asset-based loans and individual private loans, other forms of alternative financing including B2B loans, venture capital investment, and crowdfunding. Any of these might be appropriate to your goals. For instance, if your business is small but has substantial community support, a crowdfunding campaign can be an effective way to open a brick-and-mortar location. 

Likewise, depending on the industry you work in, venture capital investment can sometimes be an effective way to quickly raise large sums of money.

In short, alternative financing can be an effective means of funding all sorts of businesses. Whatever line of work you are in, it may be worth considering how alternative methods of funding can help create and grow your business.