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5 Alternative Funding Secrets Traditional Lenders Don’t Want You to Know

Reviewed by Ty Crandall

November 14, 2023


alternative funding Credit Suite

Traditional lenders are large banks and small community banks.  They offer term loans based on your personal credit score.  The problem is, if you do not meet their requirements, you can’t get a loan with them.  Many small businesses do not meet the minimum credit score requirements to get terms they can afford, or sometimes any funding at all.  

This is even true of SBA loans. They are typically processed through traditional lenders. If you cannot get one, you need to find SBA loan alternatives. This is where alternative funding options enter the scene. 

Here’s What Traditional Lenders Don’t Want You to Know About Alternative Funding

There are plenty of alternative business financing options available. There are alternative business lenders that offer term loans and lines of credit similar to what traditional banks offer.  However, they determine creditworthiness based factors other than credit score. This can make them a good option for those that do not have good credit. 

Some of them even offer alternative types of financing that many business owners have not heard of.  Due to this, most business owners can find options that will work for them. 

Learn bank rating secrets with Credit Suite's free, sure-fire guide.

1. Alternative Financing Options May Consider More than Just Credit Score

This is the crux of why many businesses do not qualify for financing at traditional banks. The credit score is the main indicator of creditworthiness. However, with alternative funding, often the lenders understand that a bad credit score does not necessarily mean that a borrower is a bad credit risk. They take other factors into consideration. 


Fundbox  is one such lender. At Fundbox, they consider business merit as opposed to personal credit.  For application purposes, they will do a soft pull on your personal credit. This will not affect your credit score.  When you make your first draw, they will do a one time hard pull that could affect your score, but the minimum is only 550.

2. Many Alternative Lenders for Small business Use Innovative Technology

There is really no reason for a lender to not use the technology available today to help them make better lending decisions. Some lenders believe they could miss out on some good borrowers if they look only at credit scores.  They use technology to help them do better. 


Upstart uses a completely innovative platform for loans.  They choose to use a combination of artificial intelligence (AI) and machine learning to gather alternative data for use in making credit decisions.

This may include such things as mobile phone bills, rent, deposits, withdrawals, and even other information less directly tied to finances.  The software they use learns and improves on its own. You can use their online quote tool to play with different amounts and terms to see the various interest rate possibilities.  

3. Some Alternative Funding Options Can Help You Build Business Credit

A separate business credit profile can help you get more business funding, while at the same time protecting your personal credit from your business debt. However, there are not a lot of creditors that will report payments to you business credit profile. That makes it hard to build a score. Some alternative lenders will report, which is a huge bonus. 


Grameen offers microloans to women business owners.  The loan amounts range from $2,000 to $15,000, and they also offer financial training and support.  In addition, they do report payments are reported to Equifax and Experian, meaning these loans help borrowers build their credit.  

Learn bank rating secrets with Credit Suite's free, sure-fire guide.

4. Alternative Lenders Often Show Preference to Women, Minorities, Veterans, and Others 

If you fall into a specific category as a business owner, you may have some special options available to you. Like Grameen, there are other lenders that focus on helping specific groups. 


 Streetshares  offers a variety of financing and investment products with fast application processes and funds deposited almost immediately. Lending products never have a prepay penalty, and the credit check is a soft one.  There is never any impact on your credit score for applying.

They lend to various types of businesses and business owners.  Still, their early mission was to help veteran business owners, and they remain true to that mission today.


Accion is a nonprofit lending network dedicated to helping small businesses.  They offer small business loans, some grant opportunities, and other resources designed to help both startups and established small businesses grow and thrive. 

They lend to small business owners in general, from all backgrounds and most industries. However, they specialize in underserved populations like minorities. 

5. Some Alternative Business Financing Options Offer 0% Interest

This is a secret that almost no one knows.  It is actually possible to get 0% financing on alternative funding and it is not a scam. 


Kiva is an online lender that is a little different. The interest rate is 0%.  That means even though you have to pay it back, it is absolutely free money. They do not check credit at all. Here’s the catch. You have to get at least 5 family members or friends to give to the cause.Furthermore, you have to pitch in a $25 loan to another business on the platform. 

Credit Line Hybrid

alternative funding Credit SuiteThis is a form of alternative business financing rather than a specific alternative lender.  The Credit Line Hybrid is a flexible product that can serve your business needs in many ways. First, you can fund your business without putting up collateral.  Then, you only pay back what you use.  

Your personal credit score needs to be at least 700.  In addition, you can’t have any liens, judgments, bankruptcies or late payments. Also, in the past 6 months you should have less than 6 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards.  There are some other requirements as well.

However, If you do not meet all of the requirements you can take on a credit partner that does meet each of these requirements. 

Many business owners work with a friend or relative to fund their business.  If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding. 

Learn bank rating secrets with Credit Suite's free, sure-fire guide.

Other Types of Alternative Funding for Small Business

In addition to the Credit Line Hybrid program, here are some other alternative funding options that Credit Suite can help you with. 

Retirement Account Financing

This Credit Suite program offers a unique and powerful way for a new or existing business to leverage assets that are in a 401(k) plan or IRA. 

In as little as 3 weeks you can invest a portion of these funds into your own business. Then, you not only have more control over the performance of your retirement plan assets, but you also have the working capital you need.

It has to be a plan that you are no longer contributing to, and you can no longer work for the employer that it was opened with.  Lastly, it has to have at least a $35,000 balance. 

Business Revenue Lending

If a business has revenue of at least $120,000 per year, it may qualify for this type of funding. Lenders verify revenue using bank statements.  There can be no recent bankruptcies, but the minimum credit score to qualify is 500.  

The business must also be in operation for a year or more, and it must do over 5 small transactions each month to get business revenue financing. 

AR Financing

Outstanding account receivables can be a source of funding for your business.You can get as much as 80% of receivables advanced.  Not only that, but you can have the funds in less than 24 hours. You get the rest of the accounts receivable amount once you collect full payment for the invoice. Closing takes 2 weeks or less. 

Receivables should be with the government or another business. 

Merchant Cash Advance

A business that accepts credit card payments and has at least a 500 FICO can get up to $750,000 in a merchant cash advance. There must be $100,000 or more per year in credit card sales, and typical approval equals one month’s credit card financing volume. 

Wait! Don’t Apply With an Alternative Lender Before You Read This

Nothing is perfect. That includes financing alternatives for small businesses. Even top alternative lending companies sometimes get a bad rap because of the prevalence of predatory lenders in the industry. Do your research and make sure you are working with a company that is trustworthy. 

The best way to do this is to work with a business credit expert like the ones at Credit Suite.  This is someone who has a relationship with many reputable lenders and can help not only find the best lender for you, but also the best funding options for your business right now. They specialize in options like the Credit Line Hybrid, lines of credit, merchant cash advances, accounts receivable Financing and more.

In addition, they can help you analyze your current fundability, and walk you through the process of improving it so that you can qualify for even more funding and better terms in the future.

About the author 

Faith Stewart

Faith has a BBA with a major in Accounting, and a combined 20 years of experience in the fields of finance and account.

Before switching to writing, she spent 10 years working in various areas of small business and personal finance and accounting, including working as a public auditor at BKD, LLP, Financial Director at Central Arkansas Development Council, and Commercial Credit Analyst at Farmer's Bank and Trust.

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