In general, banks have been available for a very long time. Historically, when an entrepreneur had a need for money for a business, he always turned to his friendly, local bank, who were happy to lend credit to their neighbors. Nowadays, such personalized banks have disappeared, and now banks are large international conglomerates. While most businesses are small, banks rarely see them as desirable business credit customers. They are much riskier than big companies.
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Seriously, time is an important factor for a small business. Things are going fast and if something goes wrong, you have to fix it right before you lose customers and turnover. If a new opportunity arises, you should be able to say yes before the opportunity disappears, even if it means unexpected costs. Banks are like cargo ships, they cannot react quickly. Applying for a loan at the bank has to go through a large layer of documentation and then spend a long time waiting for it to be approved. Bank loans are definitely useful, and when you need them, you also need a good credit rating. We at https://oakparkfinancial.com/ can help you with small company loans online.
Why are alternative financiers better than banks?
Alternative financing offers two major advantages over banks: a much higher approval rate compared to banks, and a faster application process.
Alternative funders are much more flexible
They offer several financing options. Banks offer only long term, fixed corporate loans, and credit lines. But small businesses need additional working capital for a number of reasons. For example, if you need to increase stocks? Almost every small business buys different types of stocks, but banks do not like to finance stocks, because technically it is no collateral, so if a company goes bankrupt, it will not be easy for the bank to sell them.
Your bad credit history is not that important
If your company has a negative credit history, you will almost automatically be rejected by the bank. For alternative financiers, negative credit history does not immediately mean refusal. They will most often want to see your credit rating and history. What they really want to know is your ability to repay the loan to the company now and in the future.