Types of Alternative Lending:
If your business wants to borrow no more than $25,000 at a five-year term, you’re in luck. The SBA offers microloans as well as a number of other microloan outlets. If your business is minority or woman-owned, you can apply to special microloan outlets focused on bolstering business entrepreneurship in your specific demographic.
Lines of Credit
Once a line of credit is established, interest is typically calculated based on the average daily outstanding balance. Startups and new businesses can use a line of credit as a way to improve a credit score.
Which is a more traditional approach to lending. One example of B2B lending services is Fundera, an online broker which matches lenders and borrowers. Typical minimum requirements for a term loan are 1+ years in business, 600+ credit score and $90,000+ in annual revenue.
Giving up part of your business for a cash infusion can be worth it, but only with a clear view forward. With EBC, shares are valued according to the total share count and the estimated valuation of the business.
Borrow amounts equal to up to 95% of the value of outstanding invoices. Invoices serve as collateral.
Merchant Cash Advances
MCAs are usually unsecured with less stringent qualification requirements, high-interest rates, fees, and no option for early repayment.