Business Loans from Private Business Lenders
A private business loan is another name for an alternative business loan. It applies to funding from any entity not considered to be a traditional banking institution — online business lenders, peer-to-peer funding, crowdsourcing, microfinancing and invoice trading are just a few examples of the many alternative funding options open to businesses. Private business loans are an excellent option for borrowers who may be unable to secure traditional bank financing.
Types of Private Business Loans
Private business loans come in different shapes and sizes, but common features tend to include easy applications, flexible payment terms and rapid funding. Some of the most common private business loans are listed below.
A merchant cash advance allows a business to receive a lump-sum payment in exchange for a percentage of future sales. Merchant cash advances can be fast and easy to qualify for, however they often require large payment amounts. Merchant cash advances can be a good fit for businesses with less-than-perfect credit, because your sales projections are more important than your credit score when determining eligibility.
Invoice factoring allows a business to sells its outstanding invoices to a third party (called a factor) at a discount. The factor advances the business a majority percentage of what the invoice is worth. When the factor receives the entire payment for the invoice, it sends the remaining percentage of the invoice amount to the business, and the business pays interest and/or fees for the service.
Inventory is one of the most common reasons business owners borrow money. This is especially true if you operate a seasonal business, when there are times a loan may be necessary to purchase inventory before making a profit off of it during your busy season. To best determine whether a loan would be a good move for your business, create a sales projection based on the past few years of sales from the same time period. Compare the cost of the debt to your projected sales, and remember that sales figures can vary from year to year.
Lines of credit give businesses a maximum credit limit to borrow from. Businesses can borrow money at any time, up to their established limit. The advantage to a line of credit is its flexibility. You don't have to use the amount you're approve for, so you only pay interest on the amount you have drawn. Like a credit card, the amount of the purchase is drawn from your available credit whenever you make a purchase, and your credit limit goes back up whenever you make a payment.
Why Choose a Private Business Loan?
Private business lenders can make business funding simple with online applications and a quick funding process. Although the interest rates can sometimes be higher than desired, private online lenders are generally open to businesses with lower credit and provide a level of ease, convenience and service that many traditional lenders can’t match.
A Private Lender You Can Count On
At Headway Capital, we understand how important it is for small business owners to have access to working capital whenever and wherever. It’s why we designed our True Line of Credit™ to be flexible and easy-to-use.
As a private business lender, our application process is quick and simple to fill out, and we take a holistic view of your business when determining your eligibility — it's not just based on your credit score. We provide flexible payment terms — either weekly or monthly — so you can choose what best works for your business. Plus, you don’t have to worry about waiting for funds. We deliver them to you as soon as the next business day.
12, 18 or 24 months
Weekly or monthly
Business line of credit
No Hidden Fees
See our Rates & Terms for details
Clear payment terms, interest does not compound, no penalty for early payoff
1We always do a soft inquiry unless your credit file is restricted, in which case we would ask you to contact the credit bureau to lift the restriction. Doing so may result in a hard pull.