Questions to ask when thinking about Alternative Finance

Published on 4th September 2019

Although maintaining strong growth and sustainability is a vital aspect of running a successful business, achieving that goal isn’t always easy. As well as developing a detailed business plan and bringing together a team who believes in your vision, you also need to acquire the necessary funds. But if you’re an early-stage SME with a limited trading history, seeking more traditional forms of funding may not yield the results you were hoping for. However, instead of putting your plans on hold or abandoning them entirely, why not explore how the Alternative Finance industry could help? Offering access to a vast range of business finance solutions, this might just be the pathway you need to get the ball moving in your favour again. But as always, it pays to be fully aware of what you’re entering into before getting tied into any financial commitments. So if you’re looking to apply for business finance, some of the questions you need to be asking are:

  • What Alternative finance products are available?
  • What can Alternative Finance be used for?
  • What qualifying factors do lenders look for?
  • Is the lender familiar with your sector?
  • What is the overall cost finance?
  • Are there any additional costs and fees involved?

What solutions could I apply for?

If you’re searching for business finance, it really does pay to make sure you’re fully aware of what’s available. Although one of the greatest benefits of the Alternative Finance Industry is that it puts you within reach of a diverse range of business finance solutions, this also creates one of it’s biggest challenges. By choosing to explore what this pathway has to offer you could gain access to products and packages including Secured and Unsecured Business Loans, Bridging Loans, Commercial Mortgages, Merchant Cash Advance, Invoice Finance, Inventory Finance, Asset Finance, Working Capital Finance and so much more. And with each of these solutions working in different ways to benefit your business, you not only need to be aware of what your options are, but you also need to have an in-depth understanding of how they work too. That’s why speaking with qualified business finance professional can prove so advantageous.

Have a growth project you want to get started? Worried about uneven cash flow? Or do you need to acquire new equipment? Apply for Alternative Finance or learn more about how your business could benefit.

What can I use Alternative Finance for?

This depends entirely on the type of product you apply for. Whilst some might only be suitable for specific purposes, others may carry little or no usage restrictions. As such, Alternative Finance can be used to aid and support any aspect or area of your business. So whether you need to acquire new equipment, update IT systems, move to another location, carry out renovations, release equity, resolve outstanding financial obligations, smooth out uneven cash flow or refinance existing agreements, Alternative Finance can be used to achieve virtually anything. You just need to be certain that you’re choosing the most appropriate product for whatever your business needs to succeed and grow.

How do I choose an appropriate lender?

When you take a look at Alternative Finance, you’re looking at products which lie outside of your local high street bank. As such, the types of lenders of lenders that you could apply to can range from boutique banks, specialist finance providers and alternative lenders to anyone else who may be interested in investing in your business’ success. Although this helps generate even more funding opportunities for your business, it also adds another level of complexity that you need to overcome. So when choosing a lender, you need to work with someone who is familiar with your sector and provides a variety of finance solutions. If they aren’t, you risk being tied into an agreement that might be inappropriate for your business. As such, exercising due diligence when it comes to your choice of lender would be wise.

How much is the overall cost of an agreement?

This can come down to a wide range of factors, including the type of finance agreement, choice of lender, security and the strength of your credit score. Collectively, what all of these factors affect is how much interest the lender charges throughout the course of the agreement. Interest is an important aspect that you need to keep an eye on when making your decision. Whilst products and lenders charge interest using an Annual Percentage Rate (APR) some may use other methods. For example, you might encounter lenders who charge interest per day. If you do, you need to consider the length of the agreement and how the interest stacks up when converted into APR. Should you need the agreement on a long-term basis, it could prove more expensive than using a product that charged using APR.

Are there any additional charges that I should be made aware?

As well as interest, you also need to watch out for any additional charges. These could range from set up fees, administration costs, legal costs, service charges, missed payment penalties, redemption penalties and exit fees to balloon payments. So before making your decision, you need to go through all the documents supplied by the lender in question carefully. If you have any questions or are confused about any aspect of the agreement, you can request to arrange a face-to-face meeting with the lender.

Could your business benefit from an Alternative Finance solution?

As a business owner, ensuring strong growth and remaining competitive both need to be at the top of your agenda. The challenge, however, is finding enough cash to do so. If you’ve been rejected from traditional forms of funding, dipping into your own cash reserves may seem like a smart decision to make. But this is also a risky strategy that can have lasting long-term consequences which may affect your ability to support future growth. So rather than gambling on your business’ future, why not explore how the Alternative Finance Industry could help instead? Offering you access to wide array of business finance solutions, you could source an agreement that’s appropriate for what you’re hoping to achieve. You just need to decide which one.

At Rangewell, we have Access to Finance specialists working with over 300 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you throughout the application process. We’re with you every step of the way. So if you’re looking to raise funds for your business, apply for an Alternative Finance solution today or find out more with Rangewell.


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