How Alternative Financing Can Address Unique Business Challenges

In many ways, alternative finance, or at least particular variations of alternative finance, was designed to address unique business challenges. This is mostly thanks to the flexible nature of the businesses that provide alternative finance solutions. 

“Express Business Funding is an example of the flexible nature of the Alternative Finance industry. Our services are, of course, standardized, though only to create a framework in which an entirely unique product/ service offering can be developed. A client’s needs are what shapes what we do,” says Kevin Fagundes, Chief Financial Officer at EBF. 

Alternative finance has become a prominent source of capital for many business leaders over the last few decades. This article assesses which forms alternative finance can take and how you can leverage this form of finance to your benefit. 

What is alternative finance? 

“Alternative finance was born out of need. The need of business owners – needs which could not always be resolved by traditional finance institutions,” says Fagundes. 

Traditional finance operates within a concrete framework. This framework allows traditional financers to offer their services and adhere to industry regulations on a broad scale. The issue with this, at least at a commercial level, is that each business will have a unique set of challenges it must overcome to achieve success. While traditional finance can (and does) provide viable solutions to some businesses, many businesses simply do not benefit from the structure of traditional finance – it is from this need that alternative finance emerged. 

What forms of alternative finance are available? 

“Alternative finance (as the name suggests) offers an alternative financial solution to those who do not receive what they need from traditional finance. The term itself is broad and can refer to anything from crowd funding to invoice factoring,” says Fagundes. 

A few examples of alternative financial solutions available are: 

• P2P loans, 
• Crowd funding, 
• Asset-based lending/ Asset financing, 
• Venture capital, 
• Invoice factoring, &
• Debtor-in-possession financing. 

These are just a few services that you can leverage to start, grow, or save your business – it’s advisable that you conduct a deep dive into which solutions are available and decide which offers the most value to you.  

Leveraging the Internet to access alternative finance

The Internet caused explosive growth in the Alternative Finance industry over the last few decades. Here’s why: 

Before the Internet, business owners relied heavily on the traditional finance industry to acquire capital. Now, a business owner (whose business model would not appeal to traditional finance institutions, for example) could seek financing from other avenues, such as crowdfunding or peer-to-peer lending. The internet has acted like a bridge between financers willing to work in a smaller, less formulated way and business owners who have a hard time sourcing funding from traditional avenues. 

In short, the internet has created an environment in which alternative finance has been allowed to thrive. 

The internet has also allowed customers to become better educated on the industry. A few decades ago, an individual would have to rely on the word of others for information on a niche product or service. Now, thousands of pages of research are at their fingertips. This has allowed customers to better understand (and better leverage) the alternative solutions available to them. 

Finally, the internet has made it possible for customers to help flesh out services that did/ do not exist. Because the alternative finance space is so incredibly receptive to the needs of its customers, the customer has the power to help create a unique solution to their unique problem. 

“If you are facing unchartered hurdles, I urge you to get in touch with us – or even other alternative finance platforms. The industry [alternative finance] continues to thrive because its customers are always posing new challenges to overcome. EBF is where it is because of every customer with whom we have worked. Each business has helped shape our own, and in return, we have helped to shape theirs,” says Fagundes. 

How does alternative finance mitigate risks?

Alternative finance not only helps business leaders address unique business challenges, but it also aids in mitigating risk when addressing these challenges. 

Because of the flexible nature of the industry, there are numerous ways to provide collateral on capital sourced through alternative finance means. Using crowd funding/peer-to-peer lending as an example again, those seeking capital can offer equity as opposed to using assets as collateral. 

“Alternative finance doesn’t look at collateral value alone – there are various ways to secure a loan/ finance and alternative financers factor all these in before deciding whether an investment into your business would be viable. Regardless of the type of alternative finance you seek out, the financer will get to know your business at a much deeper level than traditional finance institutions would. At EBF, we consider our customers as business partners. We not only financially lend to their business, but we also invest our time and resources too. There have been countless instances where our financial and business guidance has helped our customers achieve unparalleled success. It’s not just us – venture capital acts in the same way, as does some forms of peer-to-peer lending. If you are looking for financers who act as more than a capital source, alternative finance should be your first choice,” says Fagundes. 

This level of investment – going beyond capital injection – further mitigates risk by allowing you access to informational and consulting services that you would otherwise go without. 

In conclusion

There are many forms of alternative finance, and each is designed to assist you to grow your business in the way that works best for you. By partnering with EBF, you can access even more unique solutions tailored specifically to the challenges you currently face. 

It’s important to do your research and understand the various forms of alternative finance that exist. If you would like assistance in this regard, we will gladly chat with you! We are always open to assisting a growing business/ business owner in their journey to success, even when they require services we do not offer! Get in touch with our team here.