This year, alternative lending opportunities are growing in popularity. Gone are the days when it felt like traditional lending options were the only way to source funding for your next business venture. As the world of lending shifts to adapt to our post-pandemic lives, alternative lending has made a place for itself as a top opportunity for investors and lenders alike.
Our goal at Innovative Capital Corporation is to find innovative and creative solutions to help source the best deals for our clients. Throughout our process, we ensure transparency so that our clients clearly understand our intentions and the work we do to support their organization. The resources we have allow us to leverage multiple offers from different locations to help our clients get the best rate and terms that fit their unique needs.
Part of our job in finding innovative solutions is to seek both traditional and alternative lending options. Different types of alternative financing options available are:
- Hard money loans
- Lines of credit
- Crowdfunding
- Bridge loans
- Asset-based loans
- And more
Alternative lending provides an option for those who need funding in a timely manner. Traditional lending options are known to take more time to process and typically have stricter guidelines placed upon them. Meanwhile, alternative financing allows deals to close faster, provides flexibility for investors to have decision-making autonomy, and has a simple application process.
How can you know the best option if you haven’t seen all the options? Working with a lending partner, like Innovative Capital, borrowers don’t have to waste their time applying to a traditional bank with strict regulations only to be told no.
Our existing lender partnerships help us provide our borrowers with all the options for their financing needs. The best part? We source to multiple lenders so our clients have options, and lenders compete to provide the best rates and terms.
We’ve understood the benefits of alternative lending since our inception in 2007. Since then, Innovative Captial Corporation has helped facilitate numerous deals to help businesses make their goals a reality. Take a look at our recently funded page to see the deals we’ve helped facilitate over the years.
As alternative lending gains more traction, and the world continues to change, it’s important to understand what the future may hold. Take a look at Forbes’ trajectory on the alternative lending trends for 2022 to learn more.
Six Alternative Lending Trends To Watch In 2022 And Beyond
“It’s the understatement of the century to say that the last two years have been especially disruptive to almost every part of modern lives.
The business landscape globally has been hit the hardest, though — with major shakeups totally transforming industries from top to bottom. Small, medium and large businesses are all trying to adjust and adapt to the new normal.
As a result, the traditional way of doing business — particularly when it comes to financing and lending — just isn’t cutting it any longer for a lot of businesses.
Instead, business owners and entrepreneurs are looking to alternative lending solutions in 2022 and beyond to help them build their businesses and create the financial future they’ve always dreamed of.
To learn more about the alternative lending trends that are sure to have the biggest impact on 2022 check out the quick guide I have broken down below.
Online Lending Is Here To Stay — Permanently
Online lending really came into its own a handful of years ago with small-business owners and entrepreneurs that were looking for nontraditional sources of capital to build and grow their businesses.
And while growth in that lending industry was steady, it was a little on the slower side of things.
Nothing could be further from the truth today.
Online lending is very much part of the new normal, with small businesses, entrepreneurs and even medium- to large-size businesses looking to leverage online lending opportunities.
Entrepreneurs appreciate the speed, the 24/7 nature of many of these lending opportunities and the competition in the marketplace that inevitably tilts the scales in favor of the business owner more often than not.
Peer-To-Peer Lending Is Red Hot And Getting Hotter
Peer-to-peer (P2P) lending is also catching fire in the alternative lending space, not just with consumer loans anymore but with lending opportunities designed for small businesses.
P2P loans still felt a little bit like a wild west landscape during the pre-pandemic era.
Today, though, a number of operations offering P2P lending options have really cemented their reputation, proven their trustworthiness and more than delivered on their promises while blowing away expectations.
Expect P2P loans to be incredibly popular in 2022 (and beyond).
And AI Will Play A Bigger Role
Automation (driven in large part by Big Data and machine learning technology) and artificial intelligence are going to play a huge role in the alternative lending industry in 2022.
Nontraditional lenders have always leaned into new, innovative technology to analyze risk more so than legacy and traditional companies in the financial space.
These companies are not shy about making the most of all that Big Data has to offer, but they also aren’t shy about leveraging the power of AI to help their underwriters make better-informed decisions much faster, too.
The end result is an industry that offers much faster loan disbursement and better customer satisfaction results (a huge win for those looking for financing) as well as smarter loans with lower risk for default (a huge win for those doing the financing).
A New Secondary Market Will Be Built For Alternative Lenders
There have been rumblings about a new secondary market being built around alternative lending packages — small-ticket loans that end up getting bundled up and then sold to institutional lenders to mitigate risk — but nothing has really been put into place large scale.
Until now, anyway.
The industry is starting to see a pretty decent appetite for these kinds of lending packages to be built and invested in by some of the bigger more traditional lenders that want a piece of the nontraditional lending pie.
It wouldn’t surprise anyone if this market got bigger and bigger throughout 2022 and beyond.
Alternative Lenders Will Be Attractive Investment Options
As mentioned, nontraditional and alternative lenders are much more agile, much more likely to adopt new technology, and navigate the new normal business landscape better than bigger, slower-moving, more entrenched legacy operations.
The legacy and traditional lenders recognize this deficiency and are poised to do something about it in 2022.
Plenty of people in the business space believe that alternative lending operations themselves are going to be very attractive investment options for major companies and big player investors.
Banks Will Partner With Alternative Lending Groups
Legacy banks and traditional lenders that aren’t interested in purchasing alternative financing companies outright are still going to want to partner with alternative lenders in 2022.
A big part of this has to do with the fact that banks cannot transform their business model from top to bottom overnight because of the regulatory environment they are operating in, but they also want to be able to offer the same kind of solutions and services nontraditional lenders provide.
Banks are going to do everything they can to find ways to fold alternative lending services into their lending menus as much as possible, all while looking for ways to work within their regulatory framework to reinvent and reimagine many of their legacy services.”
