Traditional Banking Business Loans vs. Merchant ReFi Lending Options
Obtaining funding for a business is something that can stop many potential business owners in their tracks. With extensive requirements and long turnaround times, traditional business loans aren’t always an option for many new and existing businesses. Merchant ReFi aims to alleviate that issue for business owners in need of an influx of capital to start or continue operation. Today, we’ll be discussing some of the ways that alternative business financing with Merchant ReFi differs from traditional business loans to help you make an educated decision regarding your business finances. If you would like to see if your business is a good fit for our alternative business lending services, call Merchant ReFi today to discuss it with our team.
Traditional Business Loans
The list of requirements to get approved for a traditional business loan through a bank is quite extensive. Existing businesses need to provide years worth of statements in order to approve their underwriting support, including tax returns, financial statements, and P&L’s (Profit and Loss statements). Not only does this put newer businesses at a disadvantage as they don’t have as much to provide, it can make it more difficult for businesses that have been struggling to get their head above water.
Along with those statements, a bank may require collateral, which might be something you can’t offer up. You’ll also need to provide the bank with information regarding gross annual sales and FICO credit scores covering both personal and business credit. This all adds up to make the approval process very difficult for many applicants. If you have an existing loan, it is much tougher to get a second one, much in the same way that it is hard to get a second mortgage on a home. The type of business you run may make the process more difficult as well, as commercial services (such as import/export and trucking) are required to provide information regarding their volume. This makes it very hard to secure additional funding when they need it. The overall application process can also be very lengthy, taking up to 90 days for approval, time that not everyone can afford.
Alternative Business Loans
Merchant ReFi has set out to make business financing easier for everyone with our alternative approach to business lending and funding. You’re able to apply for working capital through Merchant ReFi from the comfort of your home, at any time of day or night, so you don’t have to worry about throwing on a suit to gladhand with bankers as you make your case. Thanks to the easier paperwork and relaxed requirements (typically only requiring three months worth of statements), turnaround time for an alternative business loan or funding is much faster than a traditional business loan. This is vital when a business needs a sudden influx of capital to continue operating when time is of the essence. Because Merchant ReFi is a direct funder, we’re able to quickly underwrite, with no need for a middleman or excessive hits to your credit through the application process. All of this is secure, which provides you with the peace of mind you need to take control of your business finances.
Want to learn more about how alternative business funding can help your business? Call Merchant ReFi today at (844) 737-7334! We’ll be more than happy to answer any questions you might have.