When it comes to financing a business, there are two main sources of funding – banks and non-banks. Non-bank commercial loans are financing options offered by non-bank financial institutions such as credit unions, peer-to-peer lenders, and alternative lenders. These non-bank lenders offer a variety of financing solutions to meet the needs of small businesses.

Advantages of Non-Bank Commercial Loans

Non-bank business loans offers several advantages that can be beneficial to small business owners. They typically offer more flexible repayment plans, lower interest rates, and faster approval times than traditional banks. 

Types of Non-Bank Commercial Loans

1. Lines of Credit: A line of credit is a revolving loan that allows businesses to borrow funds up to a certain limit and only pay interest on the amount they borrow. This can be a great option for businesses who need short-term financing to cover expenses. 

2. Term Loans: A term loan is a lump sum loan with a fixed repayment schedule that is typically used for larger expenses. These loans can be used to purchase equipment, invest in marketing, or expand the business.

3. Invoice Factoring: Invoice factoring is a type of financing that allows businesses to receive an advance on unpaid invoices. This can be a great option for businesses that are waiting for invoices to be paid.

4. Merchant Cash Advances: A merchant cash advance is a lump sum of money that is repaid with a percentage of daily credit card sales. This type of financing can be beneficial for businesses that have a steady stream of credit card sales.