Small business owners have traditionally looked to banks for loans, but the rise of the non-banking sector has seen a shift in the market to a more flexible and faster approach to business lending. If you’ve decided to apply for a loan to finance to access cash flow, purchase equipment or even consolidate debt, then here is a quick overview on the different types of lenders and their pros and cons.

“We have seen a significant increase in the number of small businesses looking to non-bank lenders for finance, rather than the more traditional route of securing a bank loan via personal or business collateral,” says Ben Millar, Express Fund’s Finance Manager.

“Non-bank lenders are a good option for many small businesses as they offer flexible loan products at competitive rates and most importantly, a quick application process with fast approvals” says Ben.

Whether you’re taking out a loan to purchase equipment, invest in advertising and marketing or just for working capital, a loan from a non-bank lender can often be quicker and more efficient than going down the bank loan route.

In the case of a secured bank loan, where information about your personal or business collateral is required, approvals can take up to several weeks, depending on the lender. When it comes to an unsecured non-bank loan, application details can be completed in a few minutes, often all online and turnaround time can be as little as 24 hours.

For a small business with limited cash flow, this can be the difference between thriving or just surviving - as flexibility and agility are vital to the success of any business.

The amount of working capital a business needs to run smoothly will vary depending on a range of factors, including business type, operating cycle as well as current and future growth aspirations. While large businesses can get away with a negative working capital ratio for a short-term (because of their ability to raise funds quickly), small to medium businesses need to actively maintain a healthy level of working capital - which means quick access to surplus funds when required.

For more information on the best loan for your business, contact Express Fund.