What do small business owners think of Alternative lending companies? Let’s find out.

1. What do small business owners think of Alternative lending companies? Let’s find out.

2. The last decade has seen a brand new force to enter the financial services industry. Giving serious competition to the traditional banking sector, alternative financing companies are steadily increasing their market share and changing lives and businesses along the way. Globally the total transaction value in the Alternative Financing segment is predicted to touch of US$20,000.2m by 2023. The sector is growing by 14.3% every year!

3. It stands to reason; they must be doing something right!

4. While the alt-fin industry caters to the diverse needs of a vast number of individuals and businesses, their biggest impact is on SMEs – small and medium-sized enterprises. So, we spoke to some small business owners to find out what they like most about their alternative lending partners, and this is what they said –

5. They find online lenders approachable and find that funding is more easily approved.

6. Many small business owners mentioned the ease of getting funding as their main reason for choosing alt-finance institutions. Credit scores and collaterals are not really deemed critical as business revenue data matters more for online alternative lenders. Some such as the New York-based Cresthill Capital uses credit or debit card swipes to judge the footfall and revenue of a business.

7. They combine this information with other financial data points to approve funding applications. Cresthill Capital reviews also point to the excellent customer experience they provide to their clients, and this is a point we see repeated over and over again when it comes to alt-fin companies – they are seen as much more helpful and easier to deal with compared to traditional lenders.

8. They prefer to deal with alt-lending companies when they need money quickly

9. Business owners know that when the situation demands fast cash, then going to a bank is pointless. The decision process to approve an application can take several weeks with no guarantee of success.

10. Alt-lenders are much faster! Instead of weeks or months, they wrap up approval processes in days! For example, Cresthill Capital reviews applications, negotiates terms, and wires the money in just 24 hours. This speed is made possible through automated processing systems and an extremely streamlined procedure. Alt-lenders leverage digital tools backed by AI-technology to find behavioral patterns that indicate whether a client is worth the risk.

11. They also like the fact that they have some control over the negotiations

12. The third and final reason businesses like dealing with alt-lenders are that they get exactly what they are looking for. Unlike banks where funding slabs are fairly fixed, and there is almost no room for negotiation, alt-fin companies provide extreme personalization.

13. Cresthill Capital, for example, offers to fund for any amount between $2000 and $250,000. They also provide their clients with a chance to negotiate repayment terms. This flexibility is especially appreciated by small business owners, most of whom need less than $10,000 for their business needs.

14. The Bottom Line

15. Alternative Finance is popular because it fills a gap – a gap that was left when banks tightened their purses after the 2008 market crash. Of course, now liquidity is flowing again, but the alt-fin industry is well entrenched and is attracting newer customers and retaining old ones on the strength of their better offers and excellent service. Weighed by tight regulations, even with fintech integrations, banks are not going to get back the customers they lost to alt-fin lenders anytime soon!