Why Private Lending Could Be Your Best Business Loan Option

Starting a business can be one of the most rewarding and challenging experiences of your life. The joy of being your own boss coupled with selling a product you completely believe in is exhilarating. However, the first few years of a business can be challenging. An entrepreneur, such as yourself, has to ensure that bills are paid and employees receive compensation on time. If your cash flow is inconsistent, taking out a business loan through private lending could be the difference between success and failure.

Preparation is vital for all startup businesses. The Australian Government provides a good guide for how to start up a business. However, no matter how much preparation you do, there will always be surprises. These can affect your business’ cash flow. If your business’ cash flow stops, there can be two ways of gaining finance; either by means of establishing a line of credit or through business loans. Business loans are given by many financing resources, however private lending tends to be the most flexible choice of all. Private lenders tend not to have the same strict criteria that banks have. This is because many private lenders understand what it is like to run a small business. They know that business owners may not have all of the required documentation.

Private funded business loans can be used for financing a small business on either a short term or a long term basis. This can be ideal for a business running in its second year that needs to purchase inventory or is expanding.

Benefits of Private Lending Business Loans for Small Businesses

They can help you during times of trouble: Loans can help during a time when you are experiencing problems with cash flow, or when you need to finance the expansion of your company. These issues normally arise in the second year and repairing your cash flow through a business loan can help overcome these hurdles.

No lengthy process to go through: Unlike traditional lenders such as banks who can take a long time to process all the paperwork, private lending companies can work fast. In some situations they can help you to get a loan for your business almost right away. This helps to save you valuable time that can be spent making important business decisions.

Flexibility of business loans: Private funded business loans can be more flexible than other types of commercial loans. Private lending companies can allow business loan payments to be tailored to the business’ situation. Private lending companies differ from banks, who can often require timely payments to be made on high interest rates, or venture capitalists and angel investors who can ask for a share in the business decision making and profits. Instead private lending can provide small businesses the freedom to pay back their loans at the best rate possible.

Higher approval rate than traditional lending options: Traditional financial institutions often have strict policies regarding lending that can require an excellent credit history. Not surprisingly then, banks sometimes have a very low loan approval rate. However, private lending can have more flexible regulations that result in a much higher approval rate. This is just what you need when you must act quickly on a business opportunity.
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The first five years of a new business can be the most challenging. Through taking out a business loan, you can help your small business achieve its objectives and grow. ALC Commercial has an extensive network of private lenders who are able to fund business loans quickly, allowing you to act fast and reach your business goals.