What Is Alternative Lending? Definition, Types, and How It Works (2025)

Banks giving you the cold shoulder? Join the club. Many Black entrepreneurs are turning to alternative lending to get the funding they need. Think of it as the faster, more flexible, and often more accessible way to finance your business.

Why Go Alternative?

• Speed: Get funded in days, not weeks (or months!).

• Flexibility: Less strict requirements than banks. Imperfect credit? No problem, potentially.

• Less Paperwork: Online applications that take minutes.

• More Approvals: Alternative lenders are often more willing to work with businesses banks overlook.

Types of Alternative Lending - The Quick Hits:

• Merchant Cash Advance (MCA): Lump sum upfront, repaid through your credit card sales.

• Invoice Factoring: Sell your unpaid invoices for instant cash.

• Online Term Loans: Like a bank loan, but online and faster.

• Business Lines of Credit: A pool of funds you can tap into whenever needed.

• Equipment Financing: Finance the purchase of equipment, using the equipment as collateral.

• Fix-and-Flip Loans: Short-term loans for real estate investors.

How It Works (Super Simplified):

1. Apply Online: Most alternative lenders have quick online applications.

2. Share Some Info: Basic business details, revenue, bank statements.

3. Get Approved Fast: Often within 24-48 hours.

4. Get Funded: Money in your account, sometimes the same day.

The Catch?

It can be more expensive than traditional loans (higher interest rates or fees). And some options have shorter repayment terms.

Bottom Line:

Alternative lending can be a lifesaver for Black-owned businesses. It's about getting funded on your terms.

Think alternative lending might be right for you? Get pre-approved in minutes and explore your options! Take control of your business's financial future today.