The Lending Trend: Why Alternative Funding is Becoming Popular

MazeIt’s no secret that traditional small business loans have become more difficult to secure during recent years. This type of rejection means owners may have trouble financing equipment or inventory, or that they will struggle to make payroll or lease payments. Some of these businesses are actually doing quite well—but they lack typical bank requirements to attain loan approval.


According to the quarterly BDRC Finance Monitor, half of all small and medium-sized enterprises applying for loans for the first time are rejected compared with a fifth of those re-applying for finance. What exactly is it that causes business owners to struggle to attain traditional bank loans? A few key reasons are:


Bad credit – Banks review applicants’ personal credit scores, and if their score doesn’t make the cut (often around 680) chances are they’ll fail to get a loan.


Insufficient collateral – The amount of collateral offered may not be enough to back the amount of money applicants need to borrow.


Cash flow problems – Even with sufficient cash flow, very young businesses may not have enough of a track record for banks to feel comfortable granting loans.


Sounds dismal, doesn’t it? It’s not, really. Instead of crossing the pond, you may just need to go around it. Alternative funding methods like cash advances are becoming more popular among business owners, and for good reasons. Securing working capital this way often means forgoing credit checks, leaving collateral requirements by the wayside, and considering current cash flow sufficient as long as the incoming monies are steady.


Plenty of business owners have been successful with this new strategy to secure capital.

Benjamin Bohen of Waterfront Wines & Spirits in Brooklyn, New York says, “With the money we were able to invest in the business, we’re trending towards 25% growth this year.” And in the southern region of the country, Sharon Herd of Tropic Tan in Kennesaw, Georgia, adds, “Since closing my loan, I’ve already seen more than 100 new customers walk through my door.”


Because alternative lenders are equipped to meet the needs of small business owners, their programs are becoming increasingly popular with those struggling to secure traditional funding. And the trend is only growing—for businesses that need shorter-term loans and enough funding to meet specific needs, looking into a cash advance program is definitely worthwhile.



Visit, or call 309.820.0076 today to see how an extra $5k, $30k, or more could jumpstart your business this week!


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  1. […] these non-traditional loans, they are generally considered riskier so the terms aren’t as accommodating as a typical […]

  2. […] traditional Merchant Cash Advance (MCA).  This is fast and easy access to short term capital.  It’s tied to the credit card […]

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