5 Misconceptions About Alternative Lending

5 Misconceptions About Alternative Lending

When most people think of taking a loan, they think of taking it from a bank. But the truth is that there are many alternative lending options out there to choose from. This is your best option if you need to borrow money for your business, but won’t qualify for a traditional loan. Before choosing an alternate lending option it is important to be familiar with some of the most common misconceptions about it.

One misconception is that the only people that apply for alternative lending are those that can’t get a traditional loan from a bank. Even those who could get a bank loan often choose a more flexible option for borrowing money. Alternate lending is also preferable for some people because the approval process is much quicker. It also helps you avoid having to put up collateral to get the loan.

 Another common misconception is the only people that take an alternate loan are desperate to get the money they need. Many people take one simply because they know the lender will be willing to work with them to allow them to pay off the loan when its most convenient to. 

It is also a misconception that using alternative lending is bad for your credit. The opposite is true in many cases. Taking this type of loan and paying it off quickly can help your business credit rather than hurt it. As a result, you don’t have to worry about your personal credit worsening

 No matter what size your business is or how much money it brings in, chances are there is an alternate lender out there that you can work with. You don’t need high margins in order to qualify. The typical terms for this type of loan are various. As long as you have run the business yourself for a minimum of one year, and your average daily balance is $3,000 or more and your business makes a minimum of 10 bank deposits monthly, you’ll find an alternate lender to help you.

The fifth misconception is that if you get alternate funding, it isn’t regulated. These lenders have the same regulations imposed on them as banks do.

For more information on this type of funding, please contact Diamond Capital Financing.