During unstable market conditions, alternative lenders are here to keep fueling entrepreneurism.
Most entrepreneurs have a certain level of risk tolerance baked into their DNA. It takes courage to have a dream, come up with a solid business plan, and make the leap towards realizing it, but sometimes you need a bit of outside help…particularly when finances get a little tight.
And let’s face it — with recent changes in the economy — rising interest rates, contraction, supply-chain issues — it’s not getting any easier to sleep well at night.
That’s where alternative business funders come in.
They can help you accelerate cash flow quickly — often faster than you would with traditional banks. This is particularly helpful when you need to jump on business opportunities as they happen.
Plus, the application process is often easier, with fewer hoops to jump through compared to banks. This makes alternative working capital providers an attractive option when you’re dealing with a lack of cash flow due to late payments from your customers.
Banks are great – when you meet their criteria
When you try to access financing through a bank, you’ll typically need to meet a lot of eligibility requirements first: things like showing a substantial annual revenue, having a high credit score, exhibiting consistent cash flow, and proving you hold a strong debt-to-income ratio. After all, the bank wants to minimize their risk of loss.
These requirements are not a problem for larger, more established companies. But a start-up or smaller business often won’t meet these criteria. This—maybe unfortunately for you—means many prospective small business borrowers get turned away by the big banks at a time when they’re counting on a cash infusion to keep them going. Scary times for an entrepreneur.
Agile and ready
There is another option. Alternative working capital providers have grown in popularity, mostly due to their accessibility, flexibility, and speed (compared to old-school, bricks-and-mortar banks). This makes alternative funders like Liquid Capital a great fit for entrepreneurs.
In fact, statistics show that as a small business owner, you’re more likely to get approved for a loan through an alternative funder than a traditional bank or credit union.
How does alternative funding work?
Instead of complicated applications and strict eligibility requirements, alternative funding companies make it easier for entrepreneurs to get the cash flow you need, when you really need it, thanks to:
- Lower credit score requirements: Alternative funders will often approve loans for new or small businesses that may not have the kind of credit score traditional banks require.
- Faster approval: Banks can take weeks or longer to approve a loan, but alternative funders can often get the funds you need into your hands in as little as a week.
- Easier qualification: Trying to get a loan with traditional financial institutions is often a complicated lending process which doesn’t favor entrepreneurs and small businesses.
Partnership: A good funding partner will take the time to truly understand your business challenges, goals and opportunities, propose a strategy that maximizes value for your business, and will remain an accessible and trusted partner throughout the process.
Creative financing solutions made for entrepreneurs
Alternative funders like Liquid Capital specialize in thinking the way entrepreneurs think. We know you need to be nimble with your financing, and often don’t have a long history of past performance to show to qualify for the funds you need. So we find other ways to get you the financing you need, such as Invoice Factoring and Asset-Based Lending.
Invoice factoring: your go-to working capital resource
Invoice factoring is one of the ways you can quickly inject your small business with cash. It’s simple: you sell your credit-worthy invoices to a funder like Liquid Capital, and you’ll get paid out a percentage of their value right away (usually 80% or more). It’s an advance on payments – not a loan. In essence, you’re transforming money you’re owed into money you can use to help float your business.
This kind of alternative financing is perfect for entrepreneurs, because it’s much easier to qualify for since your invoices act as security for the funding. If outstanding invoices are affecting your cash flow, invoice factoring could be the right solution for you.
Get ahead of the game with alternative lending
In today’s world, it’s easy for entrepreneurs to fall prey to the whims of an ever-changing economy. Having the right network of investors in your corner can make the need for unexpected financing a lot less stressful. Taking a creative approach to funding with an established and collaborative alternative funding provider can be the right move to help ensure your business dreams stay aloft.
Are you or your client looking to accelerate cash flow? Contact us today to learn more about how invoice factoring can help.