Decoding two biggest misconceptions about the alt-fin industry

The alternative lending industry is making forward strides pretty swiftly. This decade, 2020, will see telling changes and a significant rise in the growth of this new finance industry which is empowering SMEs. This industry has also worked on some of the existing problems SMEs faced, like that of credit flow towards the business sector. The alt-financiers are working to bridge this credit flow with effective alternative financing tools such as crowdfunding, peer-to-peer funding, factoring, etc. so that SMEs can get their chance to grow and expand.

In spite of the fact that alt-financing is developing into a go-to option for the small and medium cap businessmen, there lies a little delusion regarding this industry. Let’s go into the depths to find out what exactly it is.

Misconception 1: This sector is only for those who are seeking credit desperately.

There was a misconception during the inception of this industry that this kind of alt-financing was only for those who were looking for credit desperately. However, this notion does not hold true. With banks turning down a credit-seeking application on different grounds which range from lack of adequate collaterals, lack of proper credit score and what not! If this was true, then the alternative financing firms would have shut-down by now, and the industry would have not grown the way it has in these many years.

The unprecedented success of alt-fin firms like Cresthill Capital and Mantis Funding are good examples of that these companies operate just like other businesses and assess the risk logically before providing funds. Thus, refuting the first misconception.

Misconception 2: Only after getting rejected by banks, should you approach these firms.

Or, as I hear many times, look up alternative lending sources only after your application has been rejected by banks. This, again, is a big misconception. The truth, in fact, is that many business owners find it much easier to avail of financing from an alternative lending source as compared to banks or credit unions.

Businessmen now consider alt-financing as their first option instead of second. More so, since business owners are finding that getting funds with these firms is quite easy as compared to a traditional channel or any other credit union.

Moreover, hassle-free documentation, lesser judgments and more flexibility in terms of reviewing applications are working well among SMEs. Further, alternative lenders like Cresthill Capital review an application of a businessman without too much emphasis on their credit scores or any kind of collateral.

Moreover, they provide their seekers with services like cash advances considering that the business owners might have a requirement of a different size, thus, giving them an edge over the regular channel. Besides all this, the process of approving the application and disbursing the cash is as quick as 72 hours! Time is money, and that’s what they stand for.

Alternative firms like Cresthill Capital and Mantis Funding are thriving because of their strong ethics, ease in doing business with their clients and flexibility. As mentioned, they are working to bridge the gap among the SMEs to bring them on terms with the high-level firms and are putting efforts to maintain a smooth credit flow to provide more fluidity in their firm’s operations.