Alternative financing has become increasingly mainstream and is now often the first choice for small business owners, even those with good credit scores. There are several advantages to alternative loans, including that they provide unsecured loans, serve new businesses that banks do not, have a faster approval process with little paperwork, allow funding even with existing debt, and provide access to larger amounts of capital than banks. Alternative lenders like Mantis Funding offer various funding products to meet business owners' short and long-term financing needs.

1. Does it make sense to
apply for alternative
financing if you have a
good credit score?

2. After more than a decade spent revolutionizing
the financing industry, alternative lending
institutions are now becoming increasingly
mainstream. They were earlier seen as PLAN B
for desperate business owners refused by the
banks, but are now becoming the first choice of
SME owners who naturally think of alternative
online lenders when faced with a credit crunch.

3. Apart from the apparent advantages of alt-fin,
such as fast approval and processing, flexible
funding offers, and a hassle-free approval
procedure, there are many more reasons for
this shift. Let’s examine –

4. 1 – Unsecured loans – large corporations can
easily find collaterals to get funding, but most
small business owners don’t have this luxury.
With alternative lenders, it is easier for business
owners to access unsecured loans at competitive
rates, even for more significant amounts.

5. 2 – New businesses get served too – banks
usually only give funding assistance to
companies that have been around for a
minimum of 2 years. For new businesses – even
with a good credit score – it is impossible to even
qualify with traditional lenders. Here alt-lenders
come to the rescue.

6. Most, like the New York-based Mantis Funding,
offer to finance companies who have been
around for less than a year – they just have to
prove that they have a stable revenue stream.

7. 3 – Faster and requires almost no paperwork –
even an excellent credit score is no guarantee of
a quick response from the bank. This is not a
problem when the requirement is not urgent,
but what happens when one needs the money in
just a few days?

8. Opportunities or challenges do come up
suddenly, and for these times, the speed of
service of alt-lenders can be a lifesaver for many
business owners. We routinely see alt-lenders
like Mantis Funding review applications and
transfer merchant cash advances in 24 hours.

9. 4 – Get funding even with existing debt – Most
businesses need multiple levels of funding – a
situation where owners need a fresh round of capital
while still paying back an older deal is fairly
common. To get added funds from a bank – even with
a robust credit score and financial history – is
difficult, to say the least. Most alternative lenders are
not bogged down by existing debts, and as long as the
business is healthy, they will offer additional capital.

10. 5 – Access larger amounts – A common situation
with a banking funding request is that most
business owners don’t end up getting the amount
they need. An application of $100,000 could just
result in an approval for $50,000 – and that too
after a long wait. Ultimately, the amount will prove
to be insufficient for the purpose it was needed for.
With alternative lending, owners can be fairly
confident of getting the amount they truly need.

11. Lenders such as Mantis Funding offer a range of
funding amounts bundled with different
repayment criteria and timelines. For more
significant amounts and long-term needs, Mantis
offers a business line of credit, working capital
offers, or equipment leasing/buying financing
offers. For the short term, smaller needs clients
can take on a straightforward merchant cash
advance or short term financing.

12. Till recently, alternative financing offers were
equated to situations where poor credit scores or
lack of collateral became roadblocks for
accessing capital. But the rise in applications to
online lenders over the last two years shows that
business owners are more open to taking
advantage of the alt-lending system to overcome
business liquidity crunch and to invest in growth.