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.

Exploring Small Business Financing at the Intersection of Alternative Lending Industry

The idea of small business financing and traditional lending outlets like banks is almost an oxymoron in itself. With myriad restraints, such as restricted cash flow, delayed payments, and constant capital demands, small businesses have often found themselves struggling to avail financing.

This was the case just a few years ago when SMEs regularly faced an uphill battle trying to convince banks and credit unions to lend to them. The banks had their justifiable qualms and often rejected more applications than the ones they accepted. But with alternative financing industry abloom - thanks to alternative lenders like CrestHill Capital and Mantis Funding - things have changed drastically and for the better.

Business Financing for Small Businesses

It is a small business that takes the hit when cash flow is restrictive. Positive and constant cash flow is mandatory for growth-focused SMEs looking to capitalize on available opportunities. The various reasons why an SME finds it difficult to maintain the cash flow are:

1. Delay in payments by clients and invoice clearance
2. Unexpected personal circumstances 
3. An unexpected change in customer buying behavior 
4. Global market fluctuations
5. Overstocking
6. Seasonal demand
7. Low profits in the beginning
8. Overtrading

Traditional banks have stringent conditions, especially high credit scores and collateral demands. Most small business owners can't really fulfill these conditions, and hence their financing requests are usually rejected by banks. This is where alternative lenders like CrestHill Capital and Mantis Funding step in.

Alternative lenders like Cresthill Capital understand how the credit risk of businesses can no longer be assessed using the age-old primitive criteria that are way too narrow for our current economic market needs. Their funding conditions venture beyond the restrictive two-dimensional requirements of high credit scores and heavy collaterals.

Modern age alternative lenders like Mantis Funding implement new specific underwriting practices to assess the creditworthiness of each applicant's business. The aim is to put minimal constraints on worthy clients and disburse capital to qualified applicants as fast as possible. Typical delays like arduous documentation, lengthy processes, long wait, and strenuous legal hassles are reduced drastically. The aim is fast capital access to match faster times.

Future of Small Business Financing

With remarkable work done by alternative lenders like CrestHill Capital and Mantis Funding, the future seems to be very bright for small businesses looking to expand over the next decade. According to this report, nearly ⅔ of small businesses in need of financing did not turn to traditional banks and instead opted for alternative lending.

In other words, their first and last choice was business financing from alternative lenders. This pretty much says everything about the ease and trustworthiness in associating with non-traditional financing outlets. A quick look through the Mantis Funding reviews will give a deeper understanding of what clients appreciate most about alt-lending platforms.

Without an ounce of doubt, the next two decades will highly favor the alternative lending industry-driven growth stories. Easily accessible working capital is no longer a utopian concept for small and medium enterprises. Thanks to the alternative financing industry, it is now a realistic and mainstream option for accessing cash when needed.