Where to get money
Alternative business financing: 9 ways to fund a business beyond a bank loan
When a bank says no, or can't move fast enough, these are the options businesses actually use, what each costs you in practice, and who each one fits.
Alternative financing means business funding from outside the traditional bank loan. It has grown into a big part of how small businesses get money, because it's faster and more flexible, and because it often weighs your revenue more heavily than your credit score.
The options
- Working capital funding: a lump sum for everyday needs, usually repaid in fixed daily or weekly payments.
- Business line of credit: a revolving limit you draw from as needed, paying only on what you use.
- Merchant cash advance: a lump sum in exchange for a share of future sales. Fast, credit-flexible, and typically among the more expensive options.
- Revenue-based financing: funding sized to your revenue, repaid with fixed daily or weekly payments.
- Equipment financing: the equipment secures the deal.
- Invoice factoring: sell unpaid invoices for cash now.
Why businesses choose alternative financing
- Speed: decisions in hours or days instead of weeks.
- Access: approval can lean on revenue and bank statements, which helps younger businesses and owners with lower credit.
- Less paperwork: often a short application and recent bank statements.
- Fit: products built for specific needs, like equipment, invoices or seasonal swings.
What to watch
- Cost: convenience usually costs more than a bank loan. Ask for the total amount you'll repay.
- Payment rhythm: daily or weekly payments must fit your cash flow on slow days, too.
- Stacking: taking several advances at once can squeeze cash flow. If you already have one, ask about refinancing or consolidating instead.
- Disclosures: several states now require funders to show the cost of commercial financing in a standard way. Read it.
Questions owners ask
Is alternative financing a loan?
Some products are loans (working capital loans, lines of credit, equipment loans). Others, like merchant cash advances and invoice factoring, are purchases of future receivables or invoices rather than loans.
Can I get alternative financing with bad credit?
Often, yes. Many alternative funders weigh your revenue and bank activity more than your credit score. Better credit still tends to mean better terms.
Related
All business funding options › · Calculators ›
General information, not financial or legal advice. Terms vary by lender and business.
If a bank has already said no or cannot move fast enough, that is exactly the gap these products fill. Merchant Fund Express works with independent businesses nationwide and gives an answer in days rather than weeks.
Funding subject to approval.