Alternative loans for your small business

By Emily Burch Harris
July 6, 2023

Your business is growing faster than you imagined. Congratulations! You’ve worked hard to reach your goals, but you know you have more to accomplish. And, you need capital to get to the next level.

Imagine owning a corner coffee shop where customers drain the carafes and buy all the beans, leaving your shelves without any inventory. In a hunt to find new suppliers who can respond quickly, you locate someone nearby who wants to sell their roasting business. You have the space and decide to add it to the shop — but you need to cover the cost of the roaster while maintaining your inventory, making payroll and paying your vendors. 

Or, imagine your food truck business is booming — so much that you realize you need two additional trucks to send out to meet the demand for your award-winning burrito bowls. To make that happen, you need to cover the cost of the vehicles as well as equipping and stocking them, plus hiring and paying additional staff. 

Maybe you have the cash or some of the cash you need to expand. But if you don’t have the cash, you’re not alone. In 2022, 43% of U.S. small business owners submitted applications to lenders, according to the Federal Reserve’s Small Business Credit Survey.  Fingercheck can help.

Loans for small businesses

Every business needs funding. This is where loan programs can be helpful. Knowing about the different types of lenders is crucial to your success in obtaining capital. The three lending options available for small businesses include SBA loans, conventional bank loans and loans from alternative lenders. 

Of those three options, alternative lenders have grown in popularity because of their quick decisions and fast funding. Alternative lenders are expected to grow from $2.3 billion in 2021 to $24.5 billion in 2023, according to the August 2022 Alternative Lending Platform Report. 

The U.S. Small Business Association helps business owners find lenders that offer favorable terms. The SBA also offers loan programs designed to meet many different financing needs. With these loans, the government isn’t directly lending money to small businesses. Instead, the SBA is setting guidelines for loans made by its partners, which include banks, community development organizations and microlenders. The SBA guarantees that the loans will be repaid, so the lender’s risk is reduced and that can create more favorable loan terms for borrowers. 

However, there are drawbacks to an SBA loan:

  • Additional paperwork.
  • Extra fees.
  • Longer approval.
  • Stricter requirements to qualify.

Conventional loans are provided by banks, credit unions or other financial institutions. With a conventional loan, the lender gives the borrower a lump sum, and the borrower is required to repay the money over a fixed amount of time. A conventional loan includes interest and fees. The interest and fees will vary by the lender and will depend on the borrower’s credit score. However, conventional loans traditionally offer lower interest rates and a quicker approval process than SBA loans.

The drawbacks to conventional loans include:

  • Shorter repayment times.
  • Possible balloon payments.

Unlike SBA and conventional lenders, alternative lenders can be an option for small business owners who don’t have a strong financial history. These lenders have less strict approval requirements and make decisions quickly. 

The drawbacks to alternative loans include:

  • Interest rates.
  • Fine print.

However, each business owner who is considering financing also should consider exactly what type of loan they need and how much money they need to borrow.

Streamline your loan process

If you’re already a Fingercheck client, you may want to consider OnDeck as a lending resource. OnDeck has 17 years of experience in providing fast, trustworthy credit to small business owners.  

OnDeck’s requirements for a loan include:

  • One year in business.
  • A personal FICO score of 625.
  • $100,000 in annual business revenue.
  • A business bank account.

Through Fingercheck’s partnership with OnDeck, you can apply for payroll financing or small business loans directly in-app through our Payroll platform. 

What are the benefits of a business loan?

OnDeck’s working capital loans help small business owners cover costs. With OnDeck: 

  1. Owners are in control of their business.
  2. Loans are quickly funded.
  3. OnDeck offers lower rates.

The two types of funding that OnDeck provides for Fingercheck customers include Payroll Financing Loans and Small Business Loans.

Payroll Financing Loans allow business owners to obtain cash quickly by using their future payroll payments as collateral. OnDeck provides an advance on the amount of payroll due, and the business repays the loan with a fee once the payroll is processed.

Small Business Loans may be used for different purposes, including business growth, purchasing new equipment or hiring.

Why an alternative lender?

Alternative lenders are less rigorous in their requirements, making them more attractive to businesses that don’t have a strong financial history. Your OnDeck loan advisor will review your small business loan options with you to find the one that best suits your needs.

OnDeck makes quick decisions. And, when approved, your funding could arrive the same day. How’s that for fast?

With alternative lenders:

  • Your business doesn’t need a stellar financial history,
  • There are few restrictions on what you can use the money for.
  • The loans can be approved almost instantly. 

With OnDeck, the process is quick— about 10 minutes from start to finish in the Payroll app.

How to apply with OnDeck

In the Payroll app:

1. Start on your Payroll Dashboard and select either Finance or Request Financing.

2. On the Payroll Financing page, select Apply Now.

3. That will take you to the OnDeck landing page, where most of your contact information is conveniently prefilled for you.

4. Click on Get Started and complete the application.

5. Wait to hear back from OnDeck.

Do you need help with payroll?

We’re here to help you manage your back office so you can focus on growing your business. We can help you with payroll and payroll management. And, our partnership with OnDeck can help you with funding needs.

If you’re a small business looking to improve your payroll processes and free up your employees to focus on more critical tasks, Fingercheck is the solution you need — sign up now!

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