Conventional Lending vs. Alternative Funding

Are you overwhelmed by your business funding options? Or, perhaps you have been disappointed by the process and results of seeking out conventional lending to fund your business needs. Whatever your situation and experience might be, alternative lending programs could be of benefit to you. There are big differences between conventional lenders and alternative financers. While there is still a great need for conventional lending in today’s business climate, more businesses than ever before are turning to the alternative financing market for help. Alternative lending programs can include offerings geared toward specific industries or focus on funding for specific things like business equipment or purchase orders. Following are a few comparisons, from our team at Rafter J Funding Services (also known as RJ Funding Services), between conventional lending and alternative financing to help you in your decision making process.

Easier Application Process

In most cases, a conventional lender will ask for more documentation upon application for a loan than an alternative lender. Traditional lenders typically ask for tax returns, collateral, bank statements for the past year or longer, and thorough documentation of a business’s cash flow. Credit scores also factor heavily in disbursing funds from a conventional loan. Non-traditional lenders, however, focus on other criteria and typically require far less documentation upon application. Most alternative funding programs ask for bank and financial statements, tax returns, a voided check, a business license, and an average of credit scores.

Less Stringent Requirements

Conventional lenders must adhere to strict regulations. These regulations can be beneficial—especially when one considers the economic health of our country. Unfortunately, however, these regulations can hurt business owners by making loans harder to receive. Since alternative lending programs typically focus on different criteria, many business owners have an easier time securing alternative financing assistance.

Shorter Waiting Times

The traditional lending process can take months from application to approval and disbursement of funds whereas many alternative financing programs can release funding in a matter of days. One reason why wait times for funding are shorter with alternative lending are the facts that the application process is streamlined and alternative financing firms have less regulations to which they must adhere.

RJ Funding Services (Rafter J Funding Services) is an A+-rated company with the Better Business Bureau. Our firm has extensive experience processing an array of alternative lending offerings including Merchant Cash Advances (MCAs), purchase order financing, heavy equipment leasing, and industry-specific loans. If you have questions about your alternative funding options, call (325) 340-3366 or click here to download our application form.