Alternative Lending is the process of lending done by institutions other than banks. Broadly, any business lender, who isn’t associated with a bank is known as an alternative lender in Canada. A rough estimation in the lending industry claims that almost 80% of business loan applications are rejected by the bank. This is where the option of alternative lending emerged and has been helping business owners meet their financial needs.
Banks have a strict procedure that needs large amounts of documentation and some security to ensure there is no risk in a deal. Most banks prefer to work only with larger companies that have a proven track record and minimal risk in terms of losing money. On the other hand, alternative lenders offer financing products even to the smallest of businesses that have failed to qualify on the terms and conditions of a traditional bank.
Advantages of Alternative Lending
High Approval Rates– Alterative lending has a high approval rate for business financing as compared to banks.
Flexible Products – Alternative lenders are flexible with the amount of loan as well as the interest rates.
Quick Loans – Alternative lenders use faster methods to offer quick loans as compared to the banks. Priority Lending can take you from a complete credit application to funds in your account within 2 business days.
Less Paperwork – Unlike banks, some alternative lenders can issue approvas based only on a credit application and three months’ bank statements.