8 Best Alternative Business Loans in 2020

The 2020 financial year has been tricky for most small businesses. With a global pandemic forcing many organizations to close, or create new practices to keep their staff safe, this year has been a big challenge. As a result, there are a lot of companies that will be looking for loans and additional funding to help them recover.

In some cases, this can mean turning to a traditional lender, like a bank. However, it can be very difficult to get funding from banks. You will often need to have a strong credit history and a strong balance sheet. If you don’t have these, you might not be able to get the funding that you require.

Thankfully, there is another option for you to explore. You can get alternative funding from companies like the South Florida Funding Group. In this case, you will be able to get funds even if you have a poor credit history. You will also be able to get access to fast cash. Once you get approved you can have the money within a few days. This ensures that small businesses will be able to get the funds they need to get moving again. Let’s take a closer look at some of the best alternative business loan options.

1.      Merchant Cash Advance

One of the most popular funding options is a Merchant Cash Advance (MCA). In this case, the business will receive a lump sum payment. Any payments will be made based on the debit or credit card transactions that the business makes.

There are a few reasons why this type of arrangement is so popular. First, this type of loan tends to be very easy to manage. If your business is doing well, and you make a lot of sales, you will make a larger repayment. However, if your business is slowing down, the amount you will need to repay will be lower.  This will reduce the impact that the repayment will have on your operation. Also, because you will be making payments more frequently the life of the loan tends to be much lower than other types of loan agreements. In many cases, it will take between four to 18 months to repay the loan.

It will be relatively easy for businesses to apply for an MCA. Unlike a bank loan, there are no rigorous forms that need to be filled out. To be eligible, you will need to have been in business for between three to six months. You will also need to have a minimum FICO of 500. Each month your business will need to have a revenue of at least $10,000. You will need to provide the bank statements and credit card statements when you are applying for an MCA.

Once you submit your paperwork, you will know whether you were approved within 24 hours to 48 hours. The higher your FICO and cash flow, the faster you will be able to get approved. Once you are approved, you will be able to get your money within two to five days. You will be able to get between $5,000 to $500,000, depending on how much money your business will need to get back on track.

2.      Secured and Unsecured Business Loans

If you’re looking for a loan, there are two options that you might want to consider. You can either get an unsecured or secured business loan. These are a great option for those who are looking for fast cash, delivering funding quicker than a traditional banking loan. They also tend to be much easier, with less paperwork for you to contend with.

First, let’s take a look at how unsecured business loans work. In this case, you will be able to apply for a loan without the need to take out any collateral. In this case, the loan will be based on how creditworthy your business is. Because of this, you will not need to put any personal assets on the line. However, in some cases, you might need to sign a personal guarantee required to take responsibility if the business doesn’t pay the debt back.

In other cases, it might be best to get a secured loan. This will be backed by assets that are owned by the business. This can be an asset which you already own. In other cases, it will be some of the equipment that you intend to purchase using the loaned money. Because it is backed by a physical asset, you might pay a lower interest rate than you would when taking out an unsecured business loan. Also, because they are backed by assets this might be a better option for businesses that have bad credit.

There are a few factors to consider when you are applying for these loans. Typically, you will need to have been running the business for around three to six months. You will often need to have at least $100,000 in yearly revenue. You will need to provide the bank statements for the last three months. This will help determine how much you will be able to get approved for.

One of the biggest benefits of these types of loans is the amount that you will be able to receive if you get approved. You will be able to receive around $100,000 to $500,000. Once you get approved, you can get the money within two to three days. Another benefit of these loans is that you will get a lot of flexibility. If your revenue falls one month, you might be able to reduce the repayment that you make. However, if your revenue goes up, you won’t need to pay more.

3.      Equipment Financing and Leasing

The next popular loan option that you might like to explore is equipment leasing or financing. While these might seem similar at first glance, there is one significant difference. When you are leasing the equipment, you do not own it. At the end of the lease, you will need to give it back to the owner. In some cases, the lease agreement might limit what you can do with the equipment. On the other hand, when you choose equipment financing, once you finish paying it off, you own the equipment. While you are paying off the equipment financing loan, the equipment is used as collateral.

These decisions can be made very quickly. Once you provide the appropriate documents, you will be able to get approval within 24 hours. You will be able to get approved for between $250,000 to $1.5 million, depending on the type of equipment you want to purchase. The length of the loan period will also vary. In this case, it will often be between six to 24 months.

4.      SBA Loans

If you are looking for a loan, the SBA is known as the gold standard. This is because they are backed by the government. This will allow you to get a lot of money while paying a relatively low interest rate. There are a few types of SBA loan options to choose from, depending on what you are looking for. First, you might want to use the SBA 7(a). This is designed for purchasing equipment or real estate, financing a commercial project, or purchasing an existing business. In other cases, you might want to get an SBA 504/CDC. This type of loan is designed to purchase new land, improve your existing land, or purchase long-term equipment. Thirdly, you might want to get a microloan. This is designed to give a cash injection of up to $50,000 to small businesses.

The biggest drawback of these types of loans is the amount of paperwork that you will need to provide. For example, you will need to provide balance sheets and cash flow statements. You will also need to provide documents for any leases that you might have. Depending on the type of loan, you will also need to sign a personal guarantee. This states that, if the business doesn’t pay back the loan, you’ll accept responsibility. Also, the minimum FICO for this type of loan is over 650. You will need to have an existing business before applying for these types of loans. The only possible exception is for people who can demonstrate that they have experience running a similar type of business.

Once you have been approved, you will be able to get the money within three to four months. The amount you will receive will often depend on the type of loan that you are applying for. Generally, though you can receive between $250,000 to $10 million. The length of the loan will often depend on the type of loan you apply for and how much you get. In most cases, this can range from one year to 25 years.

5.      Commercial Property Investment Loans

If you’re starting a business, you’ll need to get a place for the business to operate. However, applying for a loan can often be difficult. In some cases, you’ll need to get the money fast to take advantage of a good deal. In this case, you might want to consider getting a commercial property investment loan. This can cover a range of locations. For example, this can extend to properties like a daycare center, restaurant, office, or warehouse.

These loans will often come with some paperwork for you to fill out. In this case, you will need to provide documents like your profit and loss statements. You will also need a tri-merge credit report. To apply, you’ll need to have been in business for at least 12 months. You will also need to have a FICO of at least 700.

The biggest benefit of these loans is how quick they are. You will know whether you are approved within 24 hours. Once your application is accepted, you can get the money within seven days. You will be able to get between $250,000 to $5 million.

6.      Residential Fix and Flip Loans

Purchasing a run-down home and fixing it up, then flipping it for a profit can be a great way of earning money. In other cases, you might want to invest in a home and hold it for a long time. To take advantage of this opportunity, you will need to make sure that you have the required funds to purchase and fix up the property.

To get this loan, you will need to have at least 12 months of real estate experience. You will also need to have completed multiple projects over the last two years. However, you won’t need to provide any tax returns. You also won’t need to show any employment verification.

When you submit your application, you will know whether you were approved in 48 hours. When you receive approval, you can expect to have the money in your account in seven days. The amount that you will be able to receive will vary. You will be able to get between $100,000 to $10 million. Depending on the type of loan you apply for, the interest rate might be as low as 6.75 percent.

7.      New Market Federal Tax Credits

A new type of funding from the government is a New Market Federal Tax Credit. In this case, you will need to come up with a project. Then, you will need to submit it for approval. The NMTC tool will then decide whether the project will occur in an underserved community location. If it does, you will be able to get the money you need. The good thing about this type of program is that it makes it easier for areas that have historically lacked funding to get the money they need.

The process for applying for a loan is similar to that used by an SBA loan. You will also need to submit a detailed business plan. If you get approved, you will be able to get between $1 million to $4 million. The loan term will be between 10 to 25 years.

8.      Hemp, Cannabis and CBD Business Loans

Currently, companies involved in cannabis production and distribution are experiencing huge growth. This area is set to boom and could provide a great opportunity for those who own these types of businesses. However, for some business owners, it can still be difficult to get the funding they need. In this case, cannabis, hemp, and CBD business loans can be the ideal option.

Unlike some other types of loans, you won’t need a minimum FICO score. This makes them ideal for those who have bad credit. South Florida Funding Group is willing to consider all types of businesses in this sector. Approval will be based on the owner’s experience in the sector. It will also depend on how strong the business plan is and what the objectives are. Ideally, the business will have been operating for one year and have a minimum monthly cash flow of at least $10,000.

You’ll be able to get between $100,000 to $500,000. Once approved, you will get the money in around seven days. Depending on the amount you are getting, the loan terms can range from one to four years.

Benefits Of Alternative Funding

As we have seen, there are plenty of alternative funding business loans for you to consider. This will ensure that you will be able to find the perfect one to support your organization. There are a few reasons why people might choose to use an alternative funding provider over a bank.

First, you won’t need a perfect funding record. Having a bad credit score can often make it more challenging for you to get a bank loan. In many cases, you might need to pay a higher interest rate, as they view you as a bigger risk. At other times, the bank will outright deny the loan. At South Florida Funding Group, we understand that poor credit doesn’t mean you are a poor business owner. We will work with you, to find the right type of loan for you and help you make a strong application.

Also, an alternative funding company will be able to get the money you need fast. We understand that you don’t have months to wait while a bank considers your application. We make the paperwork as easy as possible, so you will be able to get the fast cash you need. This is especially important if you have a tax lien or another type of judgment against your business.

Alternative funding also allows you to get a more flexible funding arrangement. It’s common for businesses to experience fluctuations in the amount of money they make. 2020 has proven that unexpected events can come along and disrupt your entire company. Thankfully, many alternative lenders will work with you, changing the repayments to better suit your organization.

Contact South Florida Funding Group

If you like the loan arrangements we have discussed and want to find out how to get fast cash for your business, we can help. Our team has a lot of experience helping people find the perfect loan for them. We will help guide you through the application process so you can get the funds you need. So, give our team a call today to discuss your options and get started.