Is Alternative Financing The Solution for your Small Business?

The reality of opening and owning a small business is that you may not always have the capital you need when you need it. Alternative financing can be a great solution for obtaining quick working cash so you can focus on providing your service or product. Here are some tips on deciding if one of these solutions is the best path for your business.


Perhaps the simplest sign that your business could benefit from a non-traditional method of financing is that you find yourself struggling to make ends meet. Depending on your type of business, waiting on payment from customers or experiencing a lapse in sales from season to season can take its toll on your access to funds to maintain operations. Exploring options like factoring and merchant cash advances in which you can see a return of quick capital may make the difference when you don’t have time to wait for a normal bank loan.


Maintaining your business is the first step towards success, but making it grow is the ultimate goal. If managing your business’ expenses and profits is going fine but could be better, it might be time to take a risk and explore what it would take to make an investment into future growth. Alternative lenders generally accept higher loan amounts than most banks because they get more in return for the risk. The extra cash on hand could be the boost you need to start taking advantage of the opportunities out there to expand or build on your existing business.


Your business likely experiences fluctuations in sales for your products and services. Alternative financing may be the best route when you find yourself in need of quick cash to cover a rise in demand for materials or use of equipment. Consider ways in which your business can utilize methods like equipment sale-leasebacks or purchase order financing to ensure you have access to the necessities to continue operations while saving some money. While you should always be prepared to cover more sales than you may be regularly expecting, it’s also smart to prepare for slower periods or unexpected events that could require your business to temporarily close.


As always, determining which type of financing is best for your small business’ unique needs and goals means spending some time and resources to evaluate and explore your options. While traditional bank loans may work in a solid economy, alternative financing methods offer greater access to capital and opportunities to grow.

SHARE IT: LinkedIn