Just as a myriad of P2P lenders have come into the market—think LendingClub, Prosper, etc.—so too have a wide variety of alternative B2B lending businesses. These non-traditional lenders are targeting businesses to cater to their needs in managing cashflow, tapping into the right resources and making the most of their finances.
We are all very familiar with a standard bank loan, the more traditional route of business lending. However, there are now a wide range of players vying for the attention of businesses. As the alternative lending industry continues to grow, businesses have the opportunity to partner with new intermediaries for lending that offer competitive rates and terms, along with ease of use and convenience.
The obvious options for B2B lending include platforms that enable equity-based crowdfunding or community-based microfinance. However, there is a growing market for another resource for cashflow management: “invoice financing”. In one sentence, invoice financing allows businesses to sell their invoices or receivables at a discount in exchange for additional working capital. Sometimes this is also known as supply chain financing or factoring.
Below, you’ll find examples of a variety of B2B lending companies to improve cash-flow, so your company’s growth trajectory isn’t threatened by lengthy repayment periods.
Self-described as the “world’s market for working capital”, C2FO offers a solution for both suppliers of goods and buyers of those invoices. C2FO has created a marketplace that brings together businesses that need quicker access to cash with large companies willing to pay the businesses suppliers’ invoices earlier for a discount.
Focused on modernizing factoring, BlueVine has a lot in common with the traditional model for factoring—but has brought the processes online. Use BlueVine’s platform for financing through a line of credit or tapping into invoice factoring within 1 business day. Interest rates can range from 0.4% a week to 1% a week, depending on the credit and the size of the credit line used.
Launched in 2012, Fundbox offers working capital to business with outstanding, unpaid invoices with an advance. As compared to business models identified as “factoring companies,” they focus helping small business owners overcome short-term cash flow gaps and never purchase the invoice, but rather finance based on the invoice value and credit risk associated. The process is explained fairly simply—create an account on their site, connect accounting information, and within a few hours you will know if you’re approved to be a Fundbox customer.
Fundera take a more traditional approach to cash-flow management. This is where you come for a small business loan; here, you fill out a questionnaire, lenders submit their terms, and you choose the one that best suites your business’s needs.
For fairly instant access to funds, Kabbage connects businesses with up to $100k credit in a few minutes. Just like a common line of credit, you only pay for the funds you use. Kabbage is ideal for scenarios in which you need to bulk up your inventory, such as for the holiday season, but don’t quite have the liquidity to purchase the amount you need ahead of time.
Get a line of credit for your business worth up to $100k, or a $5,000 to $500k loan with OnDeck. Using special, proprietary technology and credit models, they evaluate the health of a business to determine financing. As a business, you can expect a response in under 24 hours. Interesting to note is that OnDeck has teamed up with JPMorgan, collaborating to provide small business loans.
DealStruck is another option for business loans. If you’re in need of a cash infusion, this platform offers a variety of options for a loan to make it the “perfect fit” for your specific needs. The process is fully digital and you can even manage the loan via their online portal.
Lendio is a marketplace for business loans where you can view and compare all loans and their terms before selecting the right one for your business. Powered by machine learning to help you match with the right loan, this is yet another way to get a loan to grow your business, without having to work with traditional banks.
StreetShares offers 3-26 month term loans and lines up credit similar to other options, up to $100k. Positioning themselves against traditional bank lending, they encourage businesses to “tell their story” as part of the application process. In turn, StreetShares investor members compete to fund your loan to offer the most competitive rates.
To improve cash-flow from a supply chain perspective, check out Taulia. This falls slightly outside the B2B lending realm, but is worth mentioning. Their platform features a variety of options, primarily focusing on optimizing the ”financial supply chain” through invoice discounting between corporations and small business suppliers.
Want to learn more? Here’s a great resource from NerdWallet to help you determine which outlet is right for your business.
Looking for a flexible and robust ACH API to integrate into your B2B lending platform? Dwolla’s white labeled payment infrastructure allows you to seamlessly implement things like bank transfer facilitation, customer and account verification, and custom fees into your native application. Simply integrate our straightforward and well-documented White Label API.
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