Banks are the principal source of outside capital for small businesses, but there have always been alternative forms of loan capital available, including credit unions, Community Development Financial Institutions (CDFIs), merchant cash advances, equipment leasing and factoring products. Credit concerns and a lack of collateral often keep applicants from qualifying for traditional lending options. Moreover, the entire process of seeking a business loan or applying for equipment financing can be a daunting and frustrating experience for any business owner, let alone those who don’t have perfect credit.
Alternative lenders provide term loans, lines of credit, or cash advances to small businesses, outside of the traditional forms of credit offered by a bank, credit union, or the SBA. Despite their smaller scale, these alternative players have the potential to fundamentally change the way in which small business owner’s access capital, creating greater competition, price transparency, and better customer experience.
When applying with a traditional lender can take weeks or months. Traditional lenders are subject to painful underwriting policies, regulation and processes that can extend the funding timeframe drastically. The first thing that is checked is the owner’s personal credit score and the business’ credit profile. Most banks and credit unions require strong FICO scores, limited debt utilization, no late payments, and no public record filings. Alternative lenders are more concerned with the overall revenue stream of the business and the company’s ability to repay the debt through cash flow. Poor credit or bad credit, an alternative lender will give a much better chance at obtaining a loan approval.
If you are looking for a way to help your small business grow, but you are also contending with limited or no collateral, a poor credit situation, or minimal profitability, you will want to consider alternative lending. Alternative lenders are often able to provide much quicker access to cash, a incomparably easier and streamlined process, and access to more flexible lending programs than institutional lenders. Finding the right alternative source for capital is the first step in the process, so contact the experts at Red to Black Capital today to investigate your options. You might be surprised at what you’ll find when you work with a leader in the alternative lending field.
Celebrating International Women’s Day
The alternative lending industry is similar to all other financial industries where it is male driven. Women in the industry tend to think more with their hearts than our heads. Women become attached to their clients and ventures differently than the men in the industry. Where the men in the industry may look at this as a weakness many clients find strength because ALL service industries are built on relationships. Listening in an intricate part of the lending industry since there is a need to know and understand your client and their needs to find the best financial solution for them. These relationships where the client knows that the lending specialist has their best interest at heart may not only close the deal but also produce a lifelong loyalty resulting in renewals and referrals.
When looking at the difference between men and women in the industry it comes down to basic primal attributes. Men tend to be confident, direct and often times present themselves as experts where women tend to have a softer way of communicating and are more fearful of failure. This is understandable as the majority of the industry appears to be the “Old Boys Club”, however there are several women who have positioned themselves to not only be the one to start the conversation but also be the one to finish it. These women have become so good that they cannot be ignored and have moved themselves into positions of power and strength in the industry and has allowed for others to follow in their path.
There are several advantages to being a woman entrepreneur and although they may seem insulting “playing the cards” as a man would will help them to succeed. Women entrepreneurs similar to women in the lending industry are viewed as a minority. That makes them eligible for certain small business loans and other support not available to all businesses.
The Minority Business Development Agency says “access to capital remains a major barrier to many minority-owned firms.” This agency is part of the U.S. Department of Commerce and offers educational resources to help develop women owned business as well as help them obtain funding. The SBA’s Office of Women’s Business Ownership (OWBO) also offers extensive resources to help women entrepreneurs grow their business. Although the OWBO focuses on economically or socially disadvantaged women, they assist all woman-owned businesses.
Entrepreneurs who become successful because they are not afraid to ask for help in areas where they are not well educated. Putting together the right team is of the most importance, they need the right advisors to help them to realize their dream. Knowing about funding options for small business owners is a critical part of business these days. Having a lending specialist on their side who have the expertise in cash flow can strengthen their success from the start.
Why choose Red to Black Capital as your mentor for small business loans? Red to Black Capital have several specialists who are dedicated to being a mentor for their clients because they know smart business owners surround themselves with innovative, business oriented advisors. We’ll help you evaluate those options so you won’t have to waste time shopping for resources, you can stay focused on your business at hand.
What to look for in a Lender
Small businesses are realizing the advantages that alternative lending has over traditional bank loans. Some of these include an easier more streamlined application process, faster access to your funds and a payback system that does not negatively affect your cash flow.
While searching for an alternative lender you may want to consider experience, support, transparency, and simplicity. You want a lender that offers several programs to fit your particular need. You want a lender that has a good support system that will ensure your success and will be able to get answers to your questions. Of course it’s best if you have your own agent that works with you during your entire experience with them. You want a lender that is completely transparent about their terms and conditions. If a lender is hesitant to provide you with documentation detailing costs and the specifics about your transaction that should be a huge red flag. Working with a lender should be straight forward and relatively painless. Receiving your funds should be a simple process, as well as the process used to pay the advance back.
If a lender has experience working with other companies in your field, they will be able to provide you with advice and consultation that can help you to spend your money wisely. They will be able to make suggestions based on real life occurrences and ensure you get the most out of your funds.
When you look among alternative lenders, you need a reliable, reputable firm that can answer your needs and tailor a solution to your specific financial parameters. Red to Black Capital is that lender. All you have to do is communicate with us and let us ease your mind by discussing our different programs, explain the requirements, and begin the process. Red to Black Capital can be your financial solutions provider. Contact us today and let us help you!