You might thinking of starting up your own business, looking forward to expand your capital or needing money to get through tough times. While banks being the most common approach for loans, might not be a bright option for you because:
- It may take weeks or worse even months to approve your loan.
- Your application might even get rejected if you don’t meet their underwriting standards.
Fortunately, there are lot of alternatives you are thinking how can you borrow money for your business or investment: each with diverse terms and benefits. It is very important that you consider pros and cons of each option before making your decision.
1. Credit Cards:
Is one of the most traditional method of borrowing money other than bank loans. You can definitely go with this option if you have a short term need.
|Very easy to apply through an online application|
Very flexible with easy withdrawal options from an ATM.
|High interest rates and debts.|
An innovative process of raising funds where you can ask for small amount of money from a large number of people, usually via internet. Kickstarter and Indiegogo are popular sites for crowdfunding.
|Easy and fast way to generate funds.|
No upfront fees.
|Large number of competitors|
Scrutiny and rejections.
3. Peer To Peer Lending:
Peer to peer landing works via online platforms similar to crowdfunding, but there is a large difference between them. While crowdfunding gives you an equity stake, peer to peer lending is a pure loan.
|Don’t need financial institution as an intermediary|
Regulated by Financial Conduct Authority (FCA)
Flexibility of withdrawing funds anytime.
|Might take a long time for approval of your loan.|
4. Merchant Cash Advance Option:
Merchant cash advance is not a loan. A financing company gives you cash in advance for percentage of your daily sales: debit or credit card along with an interest. These are usually preferred for short term funding as they contain high interest rate.
|Easy and fast payments.|
Quick access to funds.
No need of good credit scores
|Have high fees as compared to loans and credit cards.|
Reduced cash flow due to daily deduction of credit card receipt
5. Private Lending Firms:
The private lending emerged as a major rival to banks. They are an easy and advanced option for borrowing money for your investments without worry of getting your loan approved. With the double growth rate of double digit, they are on their way to reach $1 trillion assets by 2020. This might be the most favorable option if you need long term funding.
|Fast and easy approval|
Few requirements and restrictions
No underwriting standards
|Risk of getting scammed.|
How to avoid risk of getting scammed?
There is always a risk of getting scammed when borrowing money from private lenders. To avoid this problem, you can always reach out a reputable lending company like https://www.quantumcapitalaustralia.com.au/ and seek their proficient consultation.