Search for Small Business Loan Sources and receive your matched lender list
AND received FOUR free Business eBooks worth $39.95!
Search for Small Business Loan Sources

In the wake of the financial crisis, alternative lenders popped up everywhere to fill the funding gap for small businesses. Today they continue to provide valuable financing options for many fledgling and growing companies, especially when traditional bank loans are still hard to come by. While alternative small business loans can be life-saving for some firms, it is important that entrepreneurs go into them having done their due diligence. That means having fully researched at least the following six questions.

1. What is the Best Type of Lender for my Business?
There are several different categories of alternative lenders, including marketplace lenders like Biz2Credit, direct lenders like OnDeck, and specialized lenders like Kabbage. It is essential to know the difference between the three in order to determine which one best suits your business.

2. What Type of Loan Should I Borrow?
Doing a little digging will tell you if the loan is a fixed-rate loan or an adjustable rate loan, how long the term is and what is required for collateral.

3. How Much Can I Borrow?
Each lender will have different loan limits, and those limits can vary widely by alternative lender category. Part of determining which lender to choose is finding out if you will be able to borrow enough to cover your needs.

4. What is the Interest Rate?
Once you have found the right type of loan, be sure to shop around among different alternative lenders to get the best rates. Getting at least three quotes can help you know if you’ve gotten a fair offer.

5. What Are the Payment Terms?
Some loans come with balloon payments at the end. These can be difficult to repay if you do not plan from the start how to come up with that large sum. It is also important to find out how you make your payment and whether or not there is a prepayment penalty in case you want to close out the loan early.

6. What Will Happen If I Can’t Repay on Time?
In order to be fully prepared to take on the responsibility of the loan you need to understand what is at stake. This may include collateral, such as your home or office equipment, or it could be a lein against your property or business. And of course any defaulted loan will have a huge impact on your business credit. Knowing the risks will help you be more cautious about the lending terms.

After you figured out all these crucial loan questions, you will be in a good position to secure the best alternative loan for your business.


Search for Small Business Loan Sources and receive your matched lender list
AND received FOUR free Business eBooks worth $39.95!
Search for Small Business Loan Sources