An alternative business loan provides you the quick turn times for the cash you need for your business, it is not recommended to carry an alternative business loan as long term because of a slight higher interest rate compared to a conforming business loan. You are probably seeking a short term alternative business loan for renovation, new inventory, working capital or expansion. Moreover, the better the credit score the better the terms and conditions will be for alternative business lending.
A commercial loan expert should explain alternative business loans are mostly utilized only as short term. Some alternative business loans also have a prepayment penalty, be cautious with an alternative business loan with a prepayment penalty, it will cost you thousands of dollars if you refinance before the terms and conditions on the loan are met. Always select a non prepayment penalty business loan and a discount percentage for existing out. Your exist strategy for an alternative business loan should consist of the following:
- Restore of fine tune your personal credit prior to refinancing into a conforming business loan like an asset based lending, SBA 7a or a better term alternative business loan. Adjusting your personal credit scores to 680 or better it will provide you more flexibility and leverage for business lending.
- Simply pay off the existing short term alternative business loan with new cash receivables.
Alternative business lenders require good banking habits like no NSF’s and positive average ledger balances. Lastly, alternative business lending have quicker turn times than traditional business lending and are unsecured unlike an asset based loan.
Boost Your Business Paydex Score, Experian Business Credit Ranking and Equifax Index Score
An alternative business loan can help your business credit by reporting a new trade line with Dun and Bradstreet, Experian Business or Equifax Business, basically you are building more business credit or reestablishing your business credit with an alternative business loan.
A good example: A client had a business partner that neglected his business responsibilities. As a result, some business accounts were not paid and were reported negatively to Dun and Bradstreet, Experian Business and Equifax Business. After our client exited the business partner, he reestablished his business credit with short term alternative business lending to cash flow the business. As a result, our client reestablished his business credit and also obtained a new larger alternative business loan.
Hurt Your Credit
While shopping for an alternative business loan, excessive credit inquiries negatively impacts your credit scores, similar to a consumer shopping for a home loan and obtains new credit inquiries which adversely affect the credit scores.
Always ask for a business referral instead of shopping for a loan on your own, instead of obtaining excessive and unnecessary credit inquiries that will ultimately decrease your credit scores.
For more information on how we can locally help you with your personal credit or business credit locally in Naples FL and Fort Myers FL please fill out the online contact form about your concerns or give us a call at 239.2604602. Read what our valued clients have to say about First Pro Capital and Credit Consulting Experts on our Testimonials page.
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