If alternative business finance sounds attractive to you, we advise that you consider the following before committing to an application:
- What type of finance will best suit your business needs?
- Do you require funding for your business to survive or does your business want to develop, expand or consolidate?
- Do you need cash flow or working capital, or both?
- Speaking to somebody that understands your business and the business finance options that are available will help you to avoid a bad decision
The Pros and Cons of Alternative Finance
The unwillingness of banks to offer quick and sensible lending propositions, means that alternative providers are becoming a more a popular route with business owners. However, be mindful of the following before proceeding:
- The application process is fast and allows for quick access to finance
- Your application is more likely to be approved based on a commercial attitude to lending
- Payments terms can be fixed, variable, short-term, long term or linked to your sales
- The benefits should outweigh the cost
- Some products require limited forms of security
- Rates of interest can sometimes be higher than a tradition form of bank lending
- Some products and some lenders are still evolving as business models
- Limited personal contact or customer services
- Current regulation may prevent lending to unincorporated businesses
- Appetite for lending can be unpredictable