If you’re looking for a way to grow your business and reach more clients, third-party lenders can be a great resource. For the uninitiated, third-party lenders are companies that provide loans to small businesses in need of help meeting short-term cash flow needs.
Contractor businesses often use this type of financing when they have a large project coming up but don’t have enough money set aside to cover it all at once. Third-party lending is ideal because many contractors don’t qualify for traditional bank loans and even if they do, banks may not want to lend them as much as they need. In this blog post, you are going to learn about a third-party lender, why it is a great option for a contractor business, and help approaching more clients.
What is a Third-Party Lender?
A third-party lender is a company that provides short-term loans to small businesses. These companies are known as “third parties” because they work with creditworthy borrowers who banks refuse or can’t lend to for one reason or another.
Third-party lenders provide capital to businesses with capital-intensive needs. For instance, a contractor may need to buy equipment or almost any other large purchase that they don’t have the cash on hand for.
Why Are Third-Party Lenders Better Than Banks?
A third-party lender can offer loans to small businesses that banks don’t want anything to do with. This is because the bank doesn’t have a long-term plan for the business and they won’t be able to recoup their investment in case of default. Third-party lenders, on the other hand, are more willing to take risks as they know that there’s going to be someone backing them at all times if needed.
Taking loans from third-party lenders is way better than from banks because third-party lenders are nonprofits and not for profit. They don’t care about your credit score, or if you have a bankruptcy in the past, they just want to know that their risk will be rewarded with interest rates as high as 20% – 40%.
How a Third-Party Lender Can Help You Reach More Clients
Contractors can also use third-party lenders to expand their business because they have no credit score requirements. A contractor should consider borrowing from third-party lenders because it has plenty of benefits.
For instance, when banks reject them due to low income which happens often, contractors can still get cash by tapping into third-party lender’s equity funds. This means contractors can provide more services than ever before.
Protection Against Rising Costs of Doing Business
Contractors should consider borrowing from third-party lenders, especially when banks reject them for low income which happens often and the contractor’s access to funds is limited.
Third-party lending offers protection against rising costs of doing business such as mortgage payments or rent. Contractors may borrow from third parties in order to increase revenue stream by expanding with no credit score requirements typically required by traditional bank loans.
Providing Streamlined Operation
Third-party lending is a great way to provide the contractor with financial support, freeing up their time and resources. Third-party lenders are often more flexible than banks in terms of payment plans. The availability of these loans for contractors can be invaluable because it provides them an opportunity that no bank will offer them.
Providing Additional Funding Options
Third-party lenders provide cash flow for contractors who need the additional funds. The third-party lending option is a chance for contractors to have an opportunity at being able to grow their business and meet new potential clients without having good credit requirements or collateral.
A contractor might not be in a position to wait on banks, which can take weeks or months before they give out loans, while he needs money right now. Contractors are often left with few options other than borrowing from friends or family members that may charge usurious rates of interest or provide little flexibility when it comes time for repayment. This third-party lender provides access to cash immediately without any requirement: no bad credit score required and no collateral needed.
Providing Competitive Rates
This third-party lender provides competitive rates for contractors and business owners. They have a range of interest rates depending on your credit rating, how much you want to borrow, the repayment term, and other factors. They can offer a high rate of interest if you have poor credit, but it can be lower for someone with better credit and more financial strength.
Provide Access to Additional Resources
Additional resources are a great way to excel your business and build it into something even greater than you could have done without them. The third-party lender also provides access to additional resources that they may not be able to get on their own such as advertising materials or business consulting services. They offer additional resources which can help contractors attract new customers to reach their goals of growing the company even more with this outside resource.