How Traditional Bank Loans are Different from Alternative Financing Solutions
Published: 2023-04-20 11:56:35

When SMB should choose alternative lenders over traditional

Access to financing from investors is essential for business growth because small to medium businesses—which employ nearly 50% of our workforce in India—are the foundation of our economy. Although the emergence of alternate finance lenders  and debt solutions provider has helped to diversify the lending market, it has also given SMBs a greater number of options to consider. Access to a wide range of [easy financing solutions](https://www.debtworks.in/), such as invoice-based financing, hybrid finance structures, alternative forms of debt, and equity instruments, has been made easier thanks to fintech lending. Businesses now have the chance to not only be approved for funding but also to get the best financing solutions and amount for their particular requirements.

 

The immediate need for capital is one of the most obvious and frequent reasons that prompts SMBs to look for alternative financing. With the power of an online application, an automated underwriting process, and a quick loan approval process, fintech lenders provide businesses with quick cash flow, flexibility, and freedom when they are faced with an unexpected opportunity that requires quick capital. A small- to medium-sized company may also need to secure a commercial bank loan or larger funding than their traditional credit metrics would indicate in this situation, which may lead them to seek out an alternative lending or debt financing solutions. When analysing creditworthiness, many fintech model analyses have found that less traditional activities have the tech-driven capacity and willingness to fund larger loans than traditional lenders or even ABL facilities.

 

With over 50 financing options in the market today, small businesses should weigh their options, examine terms and rates, and consider their specific finance requirements to determine their best-With more than 50 financing options available on the market today, small businesses should evaluate their options, look over terms and rates, and take into account their unique financing needs to choose the lender and loan type that will work best for them. SMBs must be analytical when looking for financing because alternative lenders tend to be less regulated and offer more flexible solutions. 

 

The lending industry has been changed by alternative lenders, who have matched market leaders with small business loans. LQD Business Finance has developed a self-developed, proprietary lending structure that makes use of fintech data-driven insights and streamlined underwriting procedures to provide underserved businesses with today's financing options that are open, flexible, and adaptable. Apply for a business loan to support your expansion and keep an eye on the rise of alternative financing in the constantly evolving lending sector.


We're out to make alternate financing accessible to all.

Through alternate finance, we'll identify the pain points and help raise capital without diluting y(our) business.

​We look into y(our) business and revenue model and tailor-make a debt solution for you.

Write to us at connect@debtworks.in.