Five Big Benefits of Alternative Funding for Small Business

Alternative funding refers to working capital obtained outside of traditional lending institutions like banks. Here are five major benefits of using alternative funding to grow your small business.

1. Keeps Things Simple
   Gone are the days of lengthy application processes requiring extensive historical data and paperwork. The lending landscape has changed dramatically in recent years. While traditional lending often burdens applicants with paperwork, alternative lending applications can be processed online or over the phone with minimal documentation. For example, to qualify for a Merchant Capital Cash Advance, your business needs to have been operating for at least 12 months with a monthly turnover of R80,000. It's that straightforward.
2. Faster Is Better
   Alternative funding focuses on providing what you need when you need it. Innovative alternative lenders understand the complexities faced by small business owners because they are entrepreneurs themselves. Market leaders in this sector can offer funding in under 48 hours, thanks to a streamlined administrative process that allows for quick processing and payouts.
3. Freedom to Spend
   No one knows your business better than you do, which is why you should have the freedom to use your funding as you see fit. Traditional lenders often impose restrictions on how funds can be used, while alternative lenders offer much more flexibility. While it’s advisable to use funds for growth-enhancing activities, ultimately, it’s your business, and you can decide how to utilize your cash injection.
4. Boost Cash Flow
   Cash flow is essential for any business, but it’s often unpredictable. Without cash on hand, you may miss out on last-minute opportunities, which can be frustrating for any entrepreneur. Alternative funding options, like a Merchant Capital cash advance, enable small business owners to apply, qualify, and receive funding in less than 48 hours. This provides a crucial boost in cash flow, allowing you to seize unexpected opportunities or manage unforeseen emergencies.
5. Healthy and Realistic Repayment Terms
   A Merchant Capital Cash Advance is specifically designed for retailers. This pay-as-you-trade model allows you to repay your loan as a small agreed percentage of each future purchase until the loan is fully repaid. This approach is particularly beneficial for small businesses, especially those with seasonal fluctuations, as it aligns repayment with trade cycles. When business is slow, repayments are slower, and when trade picks up, repayments increase accordingly. This eliminates the stress of fixed monthly repayments often imposed by traditional lenders.

The Bottom Line

As an entrepreneur, you’re already thinking differently, so why not approach working capital in the same way? Fortunately, alternative funding is thriving in South Africa, working hard for dedicated small business owners. For more information on how alternative finance can support your business’s ambitious growth, get in touch today.

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