As challenging as running a small business can be, if you’ve ever needed to source additional funding, the process can prove to be equally as challenging. For example, did you know that 80 percent of business owners get denied by traditional banks when applying for a loan? That’s after gathering the necessary documents and completing mounds of paperwork. Not to mention the time spent waiting in between.
Being rejected doesn’t mean you’ve reached a dead-end. Although, it can certainly feel that way. Non-bank lenders such as JSV Capital offer borrowers a shot at obtaining capital with more flexibility and faster funding than commercial banks. This type of alternative business lending can resolve problems with cash flow, increase your business’s value or help you to expand and grow.
In addition to being less restrictive and more versatile than traditional loan solutions, there are several advantages to seeking alternative financing for your small business.
Less Rigid Requirements
When it comes to evaluating potential borrowers, alternative business lenders have different requirements and standards compared to banks. Oftentimes a lending institution is more lenient in regards to credit score, time in business and industry.
“We work with all credit scores—anything 500 and up. In terms of time in business, we go as low as six months. So you could technically be a start-up,” explained Jason Venturelli, Founder and Senior Loan Officer at JSV Capital.
Lenders have also managed to streamline the application process. Most commonly, companies such as JSV offer an entirely online application process that can be completed via computer, smartphone or tablet. In addition to better acceptance rates and a faster turnaround, borrowers can easily upload relevant documents. Generally, banks will ask you to submit your personal tax returns from the past two years. At JSV, they only require you to turn in three months of your business bank statements.
Faster to Fund
One of the most common reasons an owner would seek alternative financing for their small business is because they require immediate capital. From having an appliance break down to various other unexpected circumstances, lenders can provide faster access to cash flow. Typically, the lending process takes one to two days from approval to the obtaining of funds. If you were to go through a bank, it could take up to 90 days. In a genuine emergency, an owner could be out of business by then.
Venturelli explained, “Someone with an 800 credit score or higher could technically get approved for a loan, but maybe they can’t wait the 60 or 90 days for funding. They might need the money next week or even today. JSV approves a file in 24 hours and funds the same day. If you’re approved on a Monday, you could sign the contract on Tuesday and get the money the same day.”
Accommodating to All Industries
Not all industries are created equal. Some are considered “high-risk” by banks and lenders. If your business or industry is classified as high-risk, this can significantly complicate your ability to obtain traditional funding. In many cases, banks will either deny a loan request or be wary to invest in high-risk industries since there’s a greater chance of financial failure.
A risky business might present bad credit or insufficient cash flow. If a company is relatively new and has been operational for less than three years, that’s also high-risk. Venturelli noted that everything from truck driving to hospitality and the cannabis industries, to name a few, are notorious for having a hard time obtaining financing.
Unlike traditional banking institutions, alternative business lenders such as JSV Capital ensure that everyone has equal access to working capital. “My lenders help small business owners when they can’t find funding. At JSV, we accept all legal industries. If you have revenue, we can help.” With the right network of lenders, you can receive instant funding even with a high-risk account.