Working Capital vs Traditional Bank Loans
Small business loans from traditional lenders might help you purchase significant assets or fund an expansion to keep your business growing. Working capital products, on the other hand, are flexible, short-term funding solutions to help you meet current goals, bridge a cash flow gap, or manage day-to-day operational needs. So what are the real differences between regular banks and what Good Funding offers?
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Traditional Banks
When you apply for a small business loan, the bank will want to know exactly how much money you need and what you intend to use it for. If you qualify, they will lend you exactly that much. So, similar to a mortgage, for example, you have to go to the bank with the cost of the house before they'll give you the loan to cover exactly that amount. The bank then will tell you exactly how long the loan payment terms will be and how much the monthly payments will be. Often, you can only have one loan at a time, which is one more constraint.
Traditional lenders require a lot of information, documentation, and time to make business loan decisions. Whether a business is applying for a long-term loan, SBA loan, or line of credit, the lender will do a deep dive into the applicant's credit history and health of the business to determine risk. Working with a traditional lender could mean you will wait days or even weeks to receive much-needed funding.
The many small business owners who apply for loan options can attest that providing collateral and detailed financial statements can be a difficult part of the loan application process. Small business lenders may need to review existing collateral, business credit scores, and personal credit history to make a loan decision. New businesses, or those recovering from a challenging time, may also need a sufficiently high credit score to get a loan approval.
As mentioned above, the bank needs plenty of information, including what the money will be used for, financial statements, a great credit score, and collateral to mitigate risk for the lender should your business default on your small business loan. As a result, just getting an approval can take several days - and receiving funding can take even longer.
Good Funding
Good Funding provides a flexible, short-term funding solution that allows small business owners to use the working capital as they see fit. Similar to a cash advance, it is based on a business's sales, and the funding can be used to maintain cash flow over the length of the term. This product also allows the potential for a business to explore additional financing options to support operations and growth.
One of the things customers love best about Good Funding is our easy, streamlined application process. Simply complete a short online application and upload your most-recent three business bank statements and your funding specialist will handle the rest.
Good Funding's business funding solution is a no-collateral working capital product. Because we rely on a broad swath of data to make funding decisions, our application does not require a hard credit pull or proof of collateral.
By combining the latest technology with unmatched underwriting expertise, Good Funding has an extremely swift decision and funding process. As a result, approved businesses can receive funds in as little as one business day.
Traditional Banks
When you apply for a small business loan, the bank will want to know exactly how much money you need and how you intend to use it. If you qualify, they will lend you exactly that much. Often, you can only have one loan at a time, which is one more constraint.
Good Funding
Our flexible financing options allow small business owners to decide how they want to use their funding. With working capital, you might even be able to take out multiple financing options at a time and take advantage of competitive interest rates.
Traditional Banks
The application process for a traditional small business loan can be lengthy because the bank must verify your ability to pay the amount owed. If you apply for long-term loans, SBA loans, or a business line of credit, lenders want to ensure you can meet your obligations.
Good Funding
Our online application process makes accessing your funding seamless. Just complete a short application online and speak with one of our lending specialists to see if you qualify for funding. We require minimal documentation with an easy upload process to get your funding sooner.
Traditional Banks
A high credit score is also often necessary; for new businesses or businesses just coming out of a difficult time. Many small business owners who apply for loan options can attest that providing collateral and detailed financial statements can be a difficult part of the loan application process. Small Business lenders may need to see personal collateral, business credit scores, and credit history to ensure the loan
Good Funding
Because Good Funding's working capital uses other types of collateral, you can apply for financing without a hard pull on your credit score. So whether you have bad credit or no credit, you may still be able to qualify for working capital.
Traditional Banks
A bank needs plenty of information, including what the money will be used for, financial statements, a great credit score, and collateral to mitigate risk for the lender should your business default on your small business loans. Because of this getting an approval can take a long time. Then, if you are approved, receiving the funding can take even longer.
Good Funding
Go from app to approval to funded in as little as 24 hours. Traditional business loans take a long time to come through, but Good Funding is quick. Simply apply, find out if you're approved, and get access to your funds within a day.
Getting an approval can take days or weeks. Funding takes even longer
Because the bank needs detailed information about what the money will be used for, the financial statements of the company proving the ability to pay the loan back, a great credit score, and sufficient collateral to mitigate risk for the lender should your business default on your small business loans, getting approval can take a long time. Then, the process to actually receive the funding for your small business loans hasn't even started yet.
Traditional bank loan?
Funding and payment terms are inflexible
When you apply for a small business loan, the bank will want to know exactly how much money you need and what you intend to use it for. If you qualify, they will lend you exactly that much. So, similar to personal loans for a house mortgage, for example, you have to go to the bank with the cost of the house before they'll give you the loan to cover exactly that amount.The bank then will tell you exactly how long the loan payment terms will be and how much the monthly payments will be. Often, you can only have one loan at a time, which is one more constraint.
Applications are lengthy
The application process for a traditional small business loan can be long because the bank needs to verify your ability to pay the amount owed. If you apply for long term loans, SBA loans or a business line of credit, lenders want to make sure you can meet your obligations. They must weigh the purpose of the purchase against your collateral. Small businesses often don't have a huge amount of collateral, which can be another hurdle. But even so, they want to make sure the business won't default on their loans in a couple years.
Working Capital?
Flexible financing designed to drive results
Flexible financing options allow small business owners to decide how they're best able to pay back the capital. Flexible financing allows business owners to pay with invoice or order finance. This is basically a cash advance that helps maintain cash flow. You might even be able to take out multiple financing options at a time and take advantage of competitive interest rates.
Short application and minimal documentation
Because working capital uses other types of collateral, a small business owner can often apply for financing without a hard pull on their personal credit scores. You might need to prove your identity and ownership of the business, as well as financial statements like a soft credit report or bank statements, but nothing as rigorous as is required by a traditional financial institution for a loan program.
Go from app to approval to funded in as little as 24 hours
Business loans take a long time to come through, but Good Funding is quick. Simply apply, find out if you're approved, and get access to your funds within a day. Online lenders are often able to provide quicker service than banks because online term loans are more agile. This means you can respond to the needs of your business in real time.
The difference in requirements?
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Traditional Bank requirements
The many small business owners who apply for business loans options can attest that providing collateral and detailed financial statements can be a harrowing part of the loan application process. Small Business lenders may ultimately need to see personal collateral , business credit scores, tax documents, and credit history to ensure the loan. A high credit score is also often necessary, and for new businesses or businesses just coming out of a difficult time, that can be prohibitive.
Working Capital requirements
Because alternative business funders look at different data in their underwriting process, a small business owner can often apply for financing without a hard credit pull. A younger company might have bad credit, or no credit, and still be able to qualify to get short-term funding, a business cash advance, business credit cards or invoice factoring. In short, applying for working capital should be much easier to obtain funding without the usual constraints of a traditional loan.
Why Good Funding?
We offer powerful products to help businesses move forward. We are sensitive to your needs and completely vested in your success. When you require secure, fast, and flexible funding, Good Funding is the good choice - the right choice.
Expertise
Caring Advisors
History Of Trust
Personal Experience
Fast And Easy Application
Lasting Relationships
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