Alternative Business Funding

Alternative business funding, also known as alternative business finance or alternative finance, is a capital boost that doesn’t involve financial providers like banks. Let’s unpack some alternative funding options, to understand which better suits your business.

Dov Girnun


CEO, Merchant Capital

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What options are there for alternative business loans?

There are several types of alternative business funding options available, including invoice financing, peer-to-peer lending and merchant cash advances. Each option has its own benefits, so it's important to choose the right one for your business.

Invoice financing

Invoice financing is another type of alternative business loan. With this type of financing, you sell your outstanding invoices to a lender in exchange for a lump sum of cash. This can be a good option if you have customers who take a long time to pay their invoices.

Peer-to-peer lending

Peer-to-peer lending is an alternative form of financing where businesses borrow money from individuals instead of banks or other financial institutions. This can be a good option for businesses with good credit scores but may be more expensive than traditional loans.

Unsecured loans

The secret to winning an unsecured business loan is in maintaining a healthy credit rating. Lenders will always favour businesses with a good-looking financial history, and not so much a business’s age in the market, or how its bottom-line looks at close-of-month. There are a few snags here, though, for the intrepid business owner. Putting up personal assets as collateral in the loan is one drawback that causes many to think twice about this option.



Short-term loans

The short-term loan is perfect for the young business with an owner that has lofty growth aspirations for it. The successful obtaining of a short-term loan hinges on the business’s trading history in the market, and not so much on a credit rating. And because of the quick turnaround possible in securing this loan, this option can be used to take advantage of the exciting opportunities that can spark growth.

Merchant cash advance

Merchant cash advances are a type of alternative business loan where the lender provides a lump sum of cash in exchange for a percentage of future credit and debit card sales. This type of financing is best for businesses that have a steady stream of revenue from credit and debit card sales, and also for businesses that accept EFTs more regularly.

Now, some may warn that alternative business funding, although a great option for businesses with good credit scores, can be more expensive than traditional loans. At Merchant Capital, we specialise in a type of merchant capital advance that looks to give you the working capital or special funding you need to chase your ambitions of growth while keeping your finances healthy. We don’t need as much of the pesky paperwork, we can give you flexible, reasonable terms, and we can design your repayment structure to suit you, by custom-fitting it to your business’s turnover. What’s more, our merchant cash advance doesn’t charge penalties if you get a little behind on the payments. Everybody wins.

So, choose Merchant Capital as your alternative business funding partner, and show us the big things you’ll achieve, with a little extra working capital.

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