How Alternative Lenders Keep SMEs in Business

Alternative lenders more and more often help small and medium-sized enterprises (SMEs) get the necessary financing. Now, when the world is faced with COVID-19, merchants report this has been the biggest challenge they’ve had to cope with. Let’s read more about the topic and see how alternative financing such as a merchant cash advance (MCA) can help you overcome your financial challenges.

Alternative Financing for Merchants: Merchant Cash Advance

Smaller businesses get often refused by traditional banks. This is especially true of high risk businesses. As a result, they appear in a situation where they struggle to obtain the funds they need. That’s where alternative lenders come into play to offer big opportunities to merchants.

After all, the existing less engagement from traditional lenders together with the rise in the need for funding make SMEs turn to alternative business funding providers more often. In recent years, alternative funding has been gaining more and more momentum.

Thankfully, reputable alternative lenders successfully solve the problem of the growing funding gap associated with MSMEs. Business financing such as a merchant cash advance or MCA from a reliable provider is the fastest access to the funds you need to grow your business.

Keeping SMEs in Business

In the years to come, expect the funding gap to accelerate by lower interest rates, uncertainties in the economy, and high corporate debt.

Based on the data provided by the U.S. Census Bureau, as of November 15, 74% of a survey respondents had reported that COVID-19 had brought from a moderate to large negative impact on their business. Now, when the 2nd wave is here, the negative effect is likely to force many small businesses to shut.

This year, the Business Research Company reported that the market was expected to decline by a compound annual growth rate (CAGR) of -1.9%, thus dropping from about $6.88 trillion (2019) to $6.75 trillion by the end of 2020. By 2023, the market is forecast to recover, with the market value reaching $7.93 trillion. This would be a 6% CAGR rise within the upcoming 3 years.

To wrap things up, today, traditional lenders are viewing SMEs as much riskier than before. That’s the reason why they now turn to alternative lending providers more often.

Author Bio:- Michael Hollis is a Detroit native who has helped hundreds of business owners with their merchant cash advance solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.