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How to apply for Alternative Finance

Published on 21st March 2019

In order for your business to operate and achieve a sustainable future, making sure that you have access to sufficient amounts of cash is essential. You just need to figure out how to do this effectively. One way could be by taking a look at what the Alternative Finance industry has to offer. Alternative Finance covers a wide range of business finance products and packages provided by anyone other than your local high street banks. Therefore, this could include boutique banks and specialist finance providers to alternative lenders. So if you’re looking to provide funds for your business but need to round your search down to a single product, this is what you need to consider when applying for Alternative Finance.

  • What do you need Alternative Finance?
  • Which products are suitable for your goals?
  • Will you need to provide security?
  • What documents will you need to submit?
  • How much attention is given to your Credit Profile?

Why does my business require Alternative Finance?

In order to begin focusing your search for an appropriate Alternative Finance solution, you need to pinpoint why your business needs the funds in the first place. Are you looking to bring in new equipment, support uneven cash flow, move to other premises? Or, do you simply need to release equity? Because there’s no limit to what can be achieved through exploring the Alternative Finance industry, identifying precisely where the money is needed will help you source an appropriate business finance package, bringing you one step closer towards achieving your goals.

Do you have a business project that needs funding? Or do you need help smoothing out uneven cash flow? Apply for Alternative Finance or learn more about how your business could benefit.

Which Alternative Finance products could help?

Once you’ve determined which package suits your business’ needs, you can begin taking a look at individual products. Each package covers a wide range of products that all work in different ways, providing their own unique benefits. Depending on the product, this can range from Business Loans, Merchant Cash Advances, Bridging Loans, Invoice Discounting and Overdraft Replacement to Hire Purchase. Therefore, you need to make sure that you fully understand each of the products that package makes available to your business, paying close attention to how they all operate. As such, in order to make an informed decision, you need to dig deeper.

Will I need to offer collateral?

You also need to assess whether the product you’re looking at is Secured or Unsecured. Secured products require you to provide collateral in the form of unencumbered equipment, machinery, vehicles, property or receivables. Although this reinforces lender confidence, earning you a lower interest rate, such agreements put your business assets at risk of repossession should you default. On the other hand, unsecured solutions don’t require you present collateral but usually carry a higher interest rate since the lender would be exposed to a greater amount of risk should you default. As such, if you own unencumbered assets, you need to decide whether you’re willing to risk these assets or pay more interest throughout the agreement.

Which documents will I need to provide?

Depending on the product, you may need to submit a number of essential documents along with your application. As well as proof of identity, other documents you may need to present could range from latest and past bank statements, sales reports, collateral documentation, invoices, Profit and Loss statements to tax returns. The documents that are required should be specified in the documents provided to you by the lender and should be prepared beforehand in order to speed up the application process.

Will lenders ask to review my credit profile?

Although lenders won’t always use your business’ credit profile against you, they may still request permission to see it, nevertheless. This helps lenders gain a stronger grasp of how well your business is performing and where you stand financially. As such, lenders will incorporate into their checks whether you have CCJs, arrears, Accelerated Payment Notices, debt and your history of paying off debt on time. If there are any issues, note that this will affect your credit score, causing lenders to perceive your business as having a higher risk of defaulting.

Therefore, the weaker your credit score the more interest you’ll need to pay, and vice versa. If you’re worried about what affect your credit profile may have on your application, you can read more on the topic here.

Still thinking of applying for Alternative Finance?

Searching for an appropriate Alternative Finance solution can be frustrating. There are so many types of finance available, with numerous lenders to choose from. Nonetheless, you still need to find a solution which will provide your business with the funds it needs to grow and establish a tangible presence. Yet, in spite of the challenges laid out before you, you don’t need to search for finance on your own - help is at hand. At Rangewell, we go above and beyond your typical business finance expert. Our Access to Finance Specialists work with over 350 lenders to offer you a complete overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide through the application process. So if you need help getting the funds your business requires, regardless of what they’re for, apply for Alternative Finance solution today or find out more with Rangewell.

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David Harrison

David Harrison

Content writer