Small Business Funding Myths that are Restricting your Profits
The financial industry is a very interesting area filled with statistics and stories, however, the truth is mixed in with the fables. This confusion of facts and myths are costing businesses money in the short term and long run. We are not just talking in cents and dollars but in thousands and millions.
Due to their centuries of history as, quote on quote, the “only” reliable source of capital loans and financing products; banks have enjoyed their crown as the sovereign and solver of any capital needs. This has given them the power to control the interest rate and other financial terms and conditions, one of which, is that it takes time and effort for approval. This is good for banks, but not exactly good for the cash-strapped small business owners.
This has led to the emergence of alternative lending firms. Some of the public might have been apprehensive at first, but the benefits of the decentralization of lending products have led to a more robust economy and faster and more convenient procedures.
Can you imagine how inconvenient and long the banking loan process will be if there was no competition around?
However, there are still myths that propagate within the small business financing communities. These myths have been incorporated into the minds of small business leaders alike. These myths must be debunked, today we aim to accomplish this goal.
Debunking Alternative Funding Myths!
- The alternative lending sector is dying. This is a big fat tale. According to Forbes’ Working Knowledge for alternative lending for the 2014 fiscal year, alternative financing is growing rapidly. Online alternative financing has grown 175% percent as it relates to the total business loans provided globally. Compare this to the 3.1% decrease for loans coming from the traditional source of capital financing through conventional lending institutions.
- The alternative lending sector is fishy. This is simple scare tactics. The alternative lending sector is not just based on hard money loans provided by sharks in the money tank. Alternative lending and financing companies are still under the jurisdiction of the department of finance or other regulatory bodies specific to the country or state. These alternative lending firms are not loan sharks but investors, entrepreneurs and business owners who’s goals are to support those businesses in need of working capital, which helps create economic development in their local communities.
- The alternative financing companies are a hassle to deal with. Nothing is farther from the truth. Reliable statistics from Statistica proves how alternative lending is indeed growing rapidly. From 2014 to 2016, debt based alternative financing loans grew from 2.2 billion in 2014 to 7.7 billion in 2016 in the United States alone. Such numbers would be impossible if dealing with the alternative loan and financing industry were to be a hassle. In fact, applying and getting approved for an alternative financing product like a purchase order financing can take between 30 minutes to an hour for approval. Compare that to days or even weeks with a conventional lending institution.
What you can Look Forward to in the Alternative Lending Industry?
Alternative financing and lending:
- Is a rapidly growing field.
- Makes it exciting and beneficial to work with an alternative financing company.
- The alternative financing sector is regulated properly and simultaneously convenient to conduct business with.
- This creates a good middle ground for small businesses to take advantage of.
- Let’s you benefit from the speed and convenience offered by the alternative financing sector.
How You Can Take Advantage of Alternative Financing Companies?
One reasons not all banks entertain small business loans, is due to the lack of return on investment by their shareholder standards. If you think about it in a macroeconomic sense, why would they loan 1 million dollars to a lot of small businesses when I can loan the money more efficiently with an enterprise business client overseas or inland?
Of course, the government does provide programs in cooperation with banking institutions that are structurally created to benefit the small business owner. They make accessing working capital a lot faster for those small businesses looking for growth.
Another benefit of alternative lending through direct local lenders is their focus on the local community and the Nation at large. Direct lenders like Meridian PO Finance focus on lending to small and medium sized businesses across the United States. This is where reliable alternative financing companies come into play.
Having served the economy by funding over $190 million to small business owners since 2011; Meridian PO Finance is equipped with the expertise and technology to provide you rapid, reliable, and reasonable financing products like purchase order loans or an invoice factoring services.
You can get your preliminary approval within a day and finance transactions in under three days. Meridian PO Finance is a leader in the alternative financing sector and has helped companies survive and thrive with a win-win mentality.