Every business has varying needs when it comes to funding. Some business owners may not need the money immediately. But there are also businesses that require instant funding. It gets more difficult, especially if the business owner does not have a stellar credit record which is one of the things that lenders usually require, unless you opt for direct business lending.
As the name implies, direct business lending is a type of financing option where you apply for a loan and get funding directly from the lender. There is no need for a middleman. Small business owners prefer to get this type of loan for its easy process and requirements. Nowadays, most companies offering direct business lending make use of the Internet as a platform. It is easier to conduct transactions.
Business owners have limited capital. In order to continue business operations and to boost growth. Unfortunately, a lot of businesses face various hurdles when it comes to financing and access to credit. Even though there are loans that are aimed to provide funds for small business owners, the reality it can still be a bit difficult to secure a loan.
For instance, if you want to apply for a loan with traditional banks. They may require several documents and other requirements which can be big hurdles for business to get the funding that they need.
When it comes to direct business lending, the process actually may vary along with the set of requirements needed. Here are some tips to have a hassle-free business application:
Unlike traditional lending and borrowing, it’s much easier to get funding with direct business lending. There are a lot of companies who operate online which means that you don’t have to personally go their office just to submit your application. The process is as fast and can be as easy as the following:
When comparing alternatives, one has to look at the advantages and disadvantages. Considering that there are so many businesses that use direct business lending, it goes to show that this financing option has its respective benefits and advantages which include the following:
Using this type of financing option has its downsides too, which include the following:
There is a wide range of business loan options depending on your business needs and your credit score. If you have good credit score around 700+ or even higher then you can simply choose which business loan option to get. You won’t have a hard time securing a loan even from banks. However, it is also important to note that although you credit score is one of the factors that lending companies and banks consider before they grant your application, it is not a guarantee.
Want to have alternatives? These are some of the most popular business loan options that you may want to consider:
Even if you have poor credit, you can still have financing options. Although of course, the choices are limited. The good news is that you will still have options. Here are some of the loan options you can get even with poor credit standing:
How does it work? The invoices that you send to your clients may take time to pay off. What a factoring company does is it charges certain fees to buy the invoices and give you around 80% of the total amount in the invoice. The rest of the payment is made after your client has finally paid the invoice. The factoring fees that you have to pay depends on the factoring company.
A good credit, it speaks volumes as to how you manage your finances personally and this reflects how you manage your business finances as well. When a business owner has good credit, he won’t have a hard time looking for a financing option where he can fund his business. There will always be lending companies who are willing to provide the necessary credit. It may take time to build good credit but it is definitely not impossible.
If you have low credit score, it is now the time to start building your credit. Make sure that you pay any outstanding debt. When you make payments, they should be on time. You should also find ways how you can increase your business income to boost your cash flow. In that way, you don’t have to rely on loans all the time.
Any type of financing option, whether it is a loan or factoring, has is respective pros and cons. To ensure business growth, it is to your discretion to compare alternatives and determine the best financing option that best meets what your business needs.