Alternative Funding

Written by Josh Dodes
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Prior to the recent introduction of alternative funding solutions for small businesses, many such businesses were completely unable to qualify for much-needed infusions of operating capital. With the lion's share of traditional loans contingent upon the capacity to provide substantial collateral as security, businesses without collateral--such as those that did not own the buildings in which they operated--were all too often simply out of luck. And in an extraordinarily competitive small business environment, that meant that they were all too often not just out of luck, but out of business.

Thanks to a handful of progressive alternative lenders, however, those small businesses in most dire need of working capital are no longer those least able to obtain it. Central to this transformation has been a nearly complete reversal of the means by which lenders obtain security from borrowers. Rather than insisting upon collateral upfront, these alternative funding experts have come up instead with a unique way of ensuring repayment on the back end. That this restructuring actually makes it far easier for borrowers to repay loans is only further reason for savvy owners to give such loans their careful consideration.

Alternative Funding and Technology

Unsurprisingly, the key to this next-generation alternative funding solution is next-generation technology. Rather than simply offering unsecured loans to small businesses, alternative lenders can now instead pay an upfront lump sum in exchange for a set dollar amount of your future credit card sales. By employing proprietary credit card swipers to subsequently collect a percentage of each credit card transaction you process, these alternative lenders ensure two things: that they will receive payment and that you will only make payment when and in proportion to the extent to which you yourself are paid.

That means that you can obtain the working capital you need when you need it, and pay it back when you can. Who said that you can't have the best of both worlds? Take the time to do independent research online, and you will quickly discover why thousands of businesses have already elected to go this alternative route.


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