All small business owners hope to qualify for SBA loans or traditional bank financing. But what happens if you need the money sooner or just don’t qualify for traditional financing? In this article, we highlight 3 alternative financing solutions that can help you move fast on growth opportunities and provide more flexibility when traditional bank financing is not available. But before we introduce these solutions, here are some factors to consider before looking for alternative financing.

  1. How much capital do you need?
  2. What are you using the capital for?
  3. How quickly do you need the capital?
  4. How long do you need the capital for?

By having answers to these questions, you’ll set yourself up for success when sourcing alternative business loans. Now that you have a good understanding for the loan amount needed and what the funds will be used for, the next step is understanding what product aligns best with your needs. Below are some short term alternative capital solutions to consider:

Line of Credit

  • Lines of credit give borrowers the flexibility to pull the capital when they need and only pay for the funds that they use
  • When customers need funding, they can access the exact amount they need up to their pre-approved limit

Bridge Financing

  • Bridge financing is an interim financing option that can be used by a small business to solidify their short-term position until a long-term financing option can be arranged
  • Bridge financing provides you with capital quickly and “bridges” the gap to obtaining longer-term financing
  • This type of financing is most normally used to fulfill a company’s short-term capital needs and is based on the current cash flow of the business.

Asset-Based Lending

  • Asset-based Lending (ABL) provides capital that’s secured by the assets of the company, namely the company’s accounts receivable, inventory, equipment, and real estate.
  • ABL is ideal for businesses rich in assets, that are experiencing rapid growth, seasonality or restructuring
  • Typical ABL borrowers are small businesses looking for flexible debt partners to provide the liquidity needed to meet payroll and expand their business.

Once you’ve identified the alternative finance solutions that work best for you, Pioneer will provide you with a dedicated representative to help you weigh out your options. To learn how you get started with alternative financing click here or give us a call at 212-302-0461.