When you need money for a small business loan, you might not think to go to a non-bank lender. But alternative lenders are becoming an increasingly popular option for business owners who need quick access to capital. Alternative lending tends to be more flexible than banks when it comes to loans, and they can often provide funding in as little as 24 hours.
Alternative lenders, non-banks who attempt to enter small business lending may not be attractive as it sounds says this article citing a survey from the NY Federal Reserve Bank.
“…satisfaction levels with online alternative lenders were lower than with traditional lenders based on unfavorable terms and higher rates.”
The Coalition for Responsible Business Finance (CRBF) is attempting to increase transparency with their SMART disclosure box, similar to the Schumer box used for credit cards but don’t expect this to quickly satisfy the CFPB who recently announced their intention to extent small business loans under its umbrella.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
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