subject: Business Lending - Non Traditional Lender [print this page] A non-traditional lender is a loan provider that is not heavily regulated by state or federal agencies. Non-traditional lenders can be financial, mortgage, or online lending companies. Some lenders provide small amounts of cash relatively quickly, while others may loan large sums that may take time to be approved.
Non-traditional lenders who finance or loan large sums of money usually require more documentation than traditional lenders, such as banks and credit unions. They may require extensive business and personal financial statements, as well as credit reports and business plans. To apply for a large loan, individuals usually have to meet certain requirements: have proof of employment, be employed for a certain amount of time, and have bank statements for a specified time period (usually twelve months).
The interest rates of non-traditional lenders also depends on if the loan is secured or unsecured. Secured loans typically have lower interest rates than unsecured loans because they minimize the lenders risk of loss. Lenders will also look at an applicants credit score and down payment on the loan to determine the interest rate. The better the credit score and the larger the down payment, the better interest rate an individual can obtain. The time period to repay a non-traditional loan also depends on the amount of funds provided. Individuals usually opt for short-term non-traditional loans because it gives them enough time to improve their credit scores and obtain better loans.
Non-traditional lending generally refers to funding that is not provided by a traditional lender, such as a bank. Instead, independent financial companies provide non-traditional lending mostly to individuals who do not meet the traditional loan requirements or those who have poor credit histories.
Through non-traditional lending, individuals with bad or no credit can obtain short or long-term funding for their business. Short-term lending includes fast cash loans and advances, which only require applicants to have a steady source of income, a valid bank account, and no bankruptcies or outstanding fast cash payments. These funding options generally do not require any financial documentation or credit checks. Most applications are available online, and only take a few minutes to complete. It can take as little as a few hours for the lender to review the application for approval and deposit the funds into the borrowers bank account. Most short-term loans and advances are usually less than one thousand dollars and must be paid off within one month.
Long-term non-traditional lending can be very similar to short-term funding options. The basic requirements are the same, but lenders may ask to review an applicants financial documents, including tax returns and credit reports. Individuals may also apply for long-term funding online, but they will have to fax or mail the needed financial documents before the application is approved. These loans may require down payments, and they can be secured or unsecured. Businesses can expect to obtain a larger sum of capital through a long-term loan.
by: Sadie Hurst
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