Applying for business loans is one way to fix disturbing issues and keep operations running in your business. As an entrepreneur, having supplementary funding can help you move forward and set things straight in areas where you face challenges.
However, it is wise to weigh different options when looking for lenders and financing options. While going for traditional banks may look like a feasible possibility, it is important to inquire the details of their loan options, application procedure and the overall process. Find out a few things a bank will not share with you when discussing a loan. On top of that, you’ll discover how alternative funding companies offer special working capital to meet your specific business needs. Here’s what’s likely to happen if you try seeking a loan from any traditional bank:
- How long the application process takes– Banks are hardly ever sincere about the duration of their approval process. Most of them look into qualifications like the size of your company, its credit history, the collateral, among other factors. Also, they’ll want to see two financial statements; yours and the one for your business. Some banks will study if your business is likely to keep a steady cash flow.
But making it through all the above setbacks does not guarantee that the bank has agreed to offer you the loan. You could dedicate months on the application procedure only to find yourself without supplementary working capital. On the other hand, most alternative lenders will send you feedback for your approval status in a week or less.
- Whether your business is better off with a different product– Well perhaps you never knew that loans are not the only business funding options available. For instance, you could go for a merchant cash advance which is a purchase of your company’s future profits. This alternative is a perfect fit for merchants who receive most payments through credit cards. And since banks major in loans, they’ll never mention that there are better products in the market for you.
- That they don’t like issuing small loans– Sorry to say that most banking institutions prefer giving loans in large and not smaller amounts. They’d rather lend larger amounts than waste time on small deals. So you may not be lucky if you’re looking for funds to get you through an approaching project, or just don’t need a large sum. Why not reach look for a financial service that lends working capital to merchants. They have more flexible options and terms
- They probably won’t offer you personalized and frequent customer service – Because of the large volume of customers in banks, they won’t provide dedicated customer care for your business. And since you want to see fast improvements which require thorough assistance, alternative finance institutions may work for you.
Because of increasing competition from modern financial institutions, traditional banks won’t let you know these four useful things that can greatly influence the performance of your business. Luckily, you now know where to run to when you need quick working capital.