Every small business looks for money, and we think that the slate of alternative lenders available to you in 2020 is worth thinking about. Alternative lending is a massive form of getting money without going to a bank, so we thought we would outline some of our favorites, and why you should consider them.
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Our Favorite Types of Small Business Alternative Lenders in 2020
Here are eight of our favorite alternative lenders for small business that you can use in 2020, in no particular order
Microloans, like those provided by Accion, are smaller in value and often require faster repayment. These types of loans are best for businesses with bad credit that need money fast and don’t know how to access it on their own. Accion operates internationally and began as a nonprofit business in South America.
2. Equipment Financing
Equipment financing does… well, exactly what it sounds like. Equipment financing is basically about getting the tools you need for a business. Basically, it is what helps you get loans and leases for equipment that your business needs. It is important to know whether loans or leases make more sense for the equipment that you use, though. So be smart about your business needs.
3. Loan Matchmakers
Loan Matchmakers are great if you don’t know what is right for you. They can help you figure out the right way to make your business loan work for you, but it takes the choice away from you. This doesn’t just point to alternative lenders, so your small business needs to consider if it is the right way to make money for you in 2020. Fundera is a good example of a loan matchmaker.
4. Lines of Credit
Lines of credit, like those that Kabbage provides, are fixed amounts of money that a lender provides which you can draw on as needed. It is not just money that you need at that moment, but allows for something to draw from in cases of emergencies or when you do need the money. It is more about planning ahead than the current moment.
6. Personal Loans
A personal loan are likely just useful for business starting out from scratch instead of growing or already successful. These are about personal credit, not just business credit. It also is frequently a smaller amount of money.
7. Online Lenders
Online lenders like Lendio are great for businesses of all sizes, though you need to know more about what you want than usual. Lenders like these work similarly to Fundera in that it is a larger online marketplace, so be sure of what you want and the rates that you are looking for. Alternative lenders like this are better for small businesses that know what they need and how much they have instead of that are just looking to survive through 2020’s problems.
If you’re looking for a loan, these are great places to start. They aren’t, however, the only places. 2020 has been an odd year for small business funding, but alternative lenders are a great place to look if you’re feeling pressure to survive or grow your business.