We'd like to take a moment to clear up some confusion regarding small business lending, your odds of getting approved and the process through which you must go to receive funds. There is definitely some incorrect information out there regarding what this type of lending is all about, and also regarding how alternative and online lenders fit into the picture. These are four myths that are simply not true…
If you get rejected by the bank, you're out of luck. This is far from the truth. Unfortunately, banks have been tightening their standards and requirements over the course of the past decade. In some instances, if you're a small business, especially a relatively new one, it may be impossible to get a bank to look twice at you. Here, however, is where online lending really has changed the game. Alternative and online lenders have vast resources at their disposal, and they want to help! They look at all aspects of your application, not just one number or score. You do have a valid chance of being approved even if a bank rejected you first.
You need the money now, but it probably won't come through for weeks. Again, with traditional banks this is likely going to be the case; however, with alternative lending everything is streamlined, to include the length of time it takes to receive the funds. From application to underwriting, to financing, it really can be completed in a matter of a couple of days.
If you need to borrow a smaller amount, it is harder to find funding. With online lenders, they specialize in smaller loans at shorter terms. For instance, at First Union, we have loan products that start at 5k. We're not merely looking for those so-called "big fish"; it's about truly helping smaller businesses—whatever their needs.
With small business lending, you have large monthly payments. Not true at all. Depending on what type of loan you get, you can make smaller daily payments. And with certain programs, when business is slower, your payments will reflect this. Again, it's about accommodating clients and being flexible enough to get you what you need when you need it.