Why Do So Many Businesses Need Non-Traditional Lending?

“You have to spend money in order to make money.” This age old adage is pretty accurate when it comes to running a business. It’s hard to compete in a marketplace if you don’t invest in yourself. Even if you have a great product, or offer a great service, if you don’t build up your company, you’ll have a tough time competing. The problem is, raising the money needed to invest can be very difficult. Even if your company is producing profits, you’ll still struggle to save up enough money to really expand your efforts.

That’s why many businesses are now turning to non-bank lending options. A non-bank business loan offers a relatively easy way to raise funds, and is much more flexible and much less of a burden than a traditional business loan. With a non-bank loan, you can sell a portion of your future earnings in exchange for  a cash advance that you can invest into your company.

Let’s say you own a gas station, and over the years you’ve done relatively well. Your customers know you, and they know you offer gas at a good price, and that your store has a great selection of drinks and food. Then, one day, your soda cooler breaks. You don’t have the money to fix it right away, and customers start to complain, upset that they are unable to get a cold drink. Even after years of success, customers will often quickly turn away.

Luckily, you can take out a cash advance. Usually, the cash advance will be anywhere from 75% to 125% of your monthly income. The entire application process often takes only a few days and money can be distributed quickly. Bank loans, on the other hand, often take weeks before you get your money. In the business world, that’s simply too long.

Going back to the example outlined above, with a cash advance you can raise the money quickly, and repair that broken cooler before you lose too many customers. Trying to cut corners, or to wait until you save up the money yourself, could irreproachably damage your company. The market is intensively competitive, and if you spend even a week or two dallying about, you can be set far, far behind. Customers might start avoiding your business, revenues will drop, and a self-reinforcing downward spiral can quickly ensue. With a cash advance, you’d be able to quickly secure the funds needed to get your coolers up and running.

That’s just one example, of course. There are many other reasons to take out a cash advance. Maybe you want to hire more staff, or order more inventory. Maybe you need to upgrade your point-of-sales system, or order new computers for the office. Whatever it is, a cash advance is a great way to gain access to the funds you need. Competition drives companies to take out cash advances, because businesses need to compete, and to do that, they need access to funds.

Looking for your own working capital? Fill out an application with Berkman Financial! We’ll get back to you right away and will help you determine if our lending options are right for you!

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