Alternative or Traditional Bank Loans?
Traditional bank loans
Getting approved for a traditional bank loan can be difficult for an SME, especially if you are running a relatively new business. Banks look at a number of factors when assessing loan applications, including the business’s trading history, financial data, the owner’s creditworthiness and general financial position. Start-ups often do not have the trading history or financial data that banks need to approve a loan.
Alternative loans
Alternative loans from private equity can be a good option for start-up SMEs who find it difficult to obtain funding from banks. These loans are provided by lenders who are prepared to take more risk than banks. Private equity lenders also consider a number of factors when assessing loan applications, but are more likely to prioritise factors such as the business plan, management team and growth potential of the business.
Alternative private equity loans have the following advantages over traditional bank loans:
(a) They can be made to start-ups even if they have no track record.
(b) They can be tailored to the specific needs of the business.
(c) they can be provided on more favourable terms than traditional bank loans.
However, alternative private equity loans have certain disadvantages:
They can be more expensive than traditional bank loans, although this is not always the case as it depends on the capacity of the provider.
They may require various costs to be paid upfront, costs that are secured by a letter of credit against the lender’s capital, have more stringent conditions such as buy-out clauses or other requirements for certain outcomes.
It is important to research and understand the pros and cons of alternative private equity loans before applying. If you own a start-up or existing SME that needs funding, alternative private equity loans may be a good option for you.
Ability to refer clients
Our company provides an important service to SMEs in Greece, helping them to obtain the capital they need to grow by referring them to an global lender.
By working with reputable overseas lenders, we are able to offer you access to a wider range of funding options that provide more attractive loan terms for SMEs.
The ability to refer clients gives us an advantage over other funding providers as we can promote our lender services and attractive loan plans to a wider audience.
To find out more about our loan plans, please visit the relevant section or contact us.
