Today, many alternative business funders are competing aggressively for clients. In the last few months a new lender launched a program that is an alternative to an SBA loan. An SBA alternative, is another financing program that will help you. In fact, it will help your business build the credit it needs. Moreover, SBA lenders like it when you have established, business credit.
An SBA Alternative
This new loan solution provides long term financing ranging from a 3 year term to a 5 year term with a monthly payment and rates ranging from 12% to 20%. The rates are higher than an SBA loan, but they require less documentation. To qualify for this loan the business borrower needs a 620 credit score and 2 years of financial statements to include profit to loss statements and balance sheets.
On the contrary, to this type of loan, exists other options. For instance, a business line of credit or a weekly payment term loan. These types of loans, will build the credit your business needs. First, if you have never had a bank loan, you need to start from the bottom. Second, they will help you manage business credit. Third, they are more expensive. However, if you can handle a higher payment, the sba will look at that in your favor. For example, let’s assume you paid $3000 per month. Maybe, that was expensive to begin with. When you apply for an sba loan, the payment maybe $1000 per month. Evidently, the sba knows that you can manage the lower payment. To summarize, this will increase your chances of obtaining an sba loan.
In summary, there are many options in the market today. These programs are known as an SBA alternative. Many business owners just like you, started off this way.
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