The Advantages of Alternative Business Loans
Among the biggest obstacles to small businesses in Australia is their inability to obtain credit. A source of cash is important for any business, as they will struggle to expand their business without the use of personal assets, a notion that is can leave people destitute should the business fail. This not-inconsiderable risk keeps many from pursuing their passion, and partly explains the increased usage of alternative business loans.
Why does this difficulty exist? From a banking perspective, there are some solid gains to be made with small businesses, who have potential to rise and be long-term partners with the banks. The issue lies with the selection process followed by the banks, and a holistic outlook of considerable conservatism.
As part of their processes, banks evaluate the security of their loan. This plays in to their notion of good investments: without an equivalent asset to back up their loan, banks will likely disallow the loan on the basis of risk. With such a large asset base, banks are able to pick and choose who is able to get a loan, and will typically avoid the risk of smaller, alternative recipients – regardless of their need or potential for growth.
Banks will often take a look at your credit history. It is a time-tested method of determining the general treatment of cash on the part of a business, however, when there is little credit history behind a business, these applications are typically rejected for lack of positive evidence – again, regardless of the potential for success behind the business.
Any defaults are held against the applicant, from any point in their past, regardless of the connection or lack thereof to the business in need. Considering how many successful entrepreneurs have failed prior to getting their business ideas off the ground, this serves as a major setback for many potential enterprises.
At UCapital, we offer small businesses the chance to grow, when the banks are unwilling to help you. We offer alternative business loans through a simple application process, with fast approvals and full transparency. We do not hold credit history or prior defaults against you when evaluating your application. If you have a successful business, which falls outside of the narrow paradigms of bank loans, we can help you to grow.
Contact UCapital today!