Banks Aren't The Only Ones Who Do Loans

Even now, a decade after the major mess of an economic collapse, getting a loan from a bank can be incredibly tough. However, it is worth noting you should rarely take this personally and just accept there are so many criteria the banks require these days. They don’t like it when credit is left unused, they don’t like it if you're starting a new business, they don’t like lending when a record is diverse and they don’t like lending to people that have an unsteady flow of cash, no matter how much they make. Basically, they like playing their loans safe. It’s as frustrating as it is real. 


The question still remains, though: what can you do if you’ve been refused a bank loan? 

Well, first things first, don’t despair or give up just yet because we have a few alternatives that are well worth you exploring. 

1. Peer-To-Peer Lending

This is one of those ideas that has taken off with more gusto than a SpaceX rocket and has fast become the most celebrated form of non-bank finance. Essentially, the way it works is through online platforms that match people’s needs with private investors who then collectively lend the money. The reason this has become more popular than Bernie Sanders is you are getting better returns than any savings account and offering borrowers better interest rates, which means they’re more likely to succeed too. Winner. 

2. Forget About Traditions

Just because you need a line of credit does not mean you have to go to the bank. A quick pit stop at somewhere like today and you’ll find there are institutions out there that are much more open-minded about who they lend too and that’s because they treat each request on a case by case basis. This means they are much more likely to lend unsecured loans because they don’t just look at backgrounds, they look at future potential too, which is why they have such high approval ratings. 

3. Merchant Cash Advance

Talking of unsecured loans, there has been a sharp rise in Merchant Cash Advances within the alternative lending sectors. The reason for this rise is because banks don’t like lending to businesses that have card terminals. There are just too many risks for them - rented premises, hired equipment, seasonal fluctuations in revenue etc. That’s where merchant cash advances solve this issue. They base their loans on recent card transactions and then request repayments are made as a percentage of future takings. One thing a lot of people like about this option is how painless it feels. It’s like having your taxes taken out of your paycheck instead of you having to pay them yourself. 

Of course, these aren’t the only lending trends to have cropped up in recent times as a result of stringent bank requirements. There are also things like micro-lending, factoring, credit and charge cards, supplier credit agreements, revolving credit facilities and purchase order financing. So, if you do find yourself getting turned away by the revolving door of your bank, don’t panic. There are plenty of other options, friendlier ones, that are well worth you approaching.


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