When inquiring about a loan or where to go to borrow money, banking institutions seem to be the obvious place to go to complete such a task. For those who do not keep up with the business-to-business industry or do not own and operate a business, it might not be well-known that there are companies within this landscape that specialize in lending money to other businesses.
What is B2B lending?
This type of transaction allows for new and up-and-coming businesses to get financial support from other bigger and more established businesses in an effort to help the startups and mom-and-pop shops expand.
Within the B2B lending model, small businesses have less restrictive borrowing caps like they would have if they decided to borrow money from a bank and the larger businesses can decide how and when the money should be paid back on a case by case basis. This allows for businesses to choose (as the borrower) or take up (as the lender) a financial relationship on their own terms.
Top B2B Lending Platforms
By providing a space for buyers and sellers to connect directly without interference, C2FO gives smaller businesses looking for a lender a way to choose a company that has loan requirements that they can meet to both pays back later on and to utilize the money to improve and expand operations. Being able to conduct these types of business deals without a bank allows for faster lending and payback transactions and the process would take place within the B2B market for a more tailored experience.
Small business owners seeking a more old-fashioned, to-the-point style of lending, Fundera provides options that are unchangeable based on the needs of their business. This way lending is a safe and upfront way of getting funds because it is similar to getting a financial quote that one would get from a traditional bank. The standards are known and the expectations are clear. When faced with the complexities of operating an up-and-coming company, having a simple way to acquire loans can be good for business.
Operating a business requires on-demand access to money at any given moment. As a newcomer in the industry, smaller businesses often do not have all the resources that they need to function at the full capacity of a legacy or a traditional corporation. To be able to compete in the market, small and medium-sized companies often rely on b2b lending platforms to keep up. Kabbage provides credit lending services to businesses that might not be able to receive them from banks due to the risk. Plus, as time goes by and a smaller business gains its footing in the market, Kabbage lessens the payback rates.
Established specifically to cater to up-and-coming businesses, Funding Circle is a worldwide b2b lending platform (company) that provides these companies with start-up money. Think of it like offering the owner of a small business a source of seed money for investment. Whether it is to pay for facilities, equipment, or bringing on your first employee, Funding Circle helps to give small businesses a starting point in which they can begin to operate and make money.
Market Invoice Pro
With Market Invoice Pro, users have the ability to quickly turn their assets into money for every bill of charge for a service completed by their business. Loans are provided at a limit of £4 million pounds/euros, based upon the cost of running the business every day. The amount of money borrowed acts as a source of credit instead of a typical bill-slashing service. Businesses are able to receive as much income within a loan as desired to the full cost of the number of bills that a business has acquired and the interest is only attached to the total amount of the loan initially taken on.
If you run a business based on a cause or uphold values around making the world a better place, then Street Shares might be the lender for you. With a source of credit loans capped at $100,000 and contract funding capped at half a million dollars, Street Shares provides specialized payment rates for businesses that have brands or values-based around a cause. This provides these types of businesses with a financially sound foundation to operate at their full potential and help spread awareness.
If a small business owner needs money right here and right now, then BlueVine is certainly the right lender for their needs. Loans are provided through the financing of cost receipts a.k.a. bills or an unestablished source of credit. Loans are passed through within a day that a quest is made. Small businesses can be loaned from $5,000 to a cap of $2 million. Weekly interest rates of 0.4% to 1% are attached to the payback of what was borrowed. BlueVine should not be recommended for use over an extended period of time. The amount of time that this service should be utilized is at around 3 months or less.
Considered somewhat of an outlier within the business-to-business lending industry, Taulia offers users a way to enhance a small business the way a company handles the cash that is coming in and out of operations. The tools offered on Taulia specialize in bettering a business’ economic supply line by cutting down on receipts to and from large and small company providers.
Operated based on artificially intelligent technology, Lendio can show potential borrowers a variety of lending plans and conditions before choosing a loan that fits a small business’s needs. This is another option for up-and-coming businesses that want to get rid of having traditional financial institutions as the middle-man in the journey to grow their operations. Lendio is a staple in the B2B lending industry.
With OnDeck, users can receive a source of credit capped at $100,000 or they can borrow from $5,000 to up to $500,000. Utilizing a variety of features that calculate the state of the business, OnDeck figures out the quality of operations and bases that on the amount of money that they are willing to provide for a borrower. With a quick response to requests, a small business can expect a reply in less than a day.
Which Lender is Right for My Business?
After discussing the different B2B lending platforms in this article, it still can be a daunting choice trying to select which platform might be the best fit for the operational costs and needs of your business. That is why before you go shopping for a loan you must figure out why you need one in the first place. The chart below can assist first-time B2B lend-seekers in their journey to find the best borrowing service for them.
|Reason to get a loan||Best Lending Platforms|
|Want to raise money in order to operate the business as a functioning service?||C2FO: Converts invoices to money to manage operating costs
Marketing Invoice Pro: Provides an established source of credit based on the cost of total collections
|Need a lot of money to invest in the foundation of the company?||Funding Circle: Provides term borrowing conditions catered to new businesses based on an old school standard of handling risks
Street Shares: Market the business to investors that will offer money to cause-based companies
|Already have skin the “running a business” game but just need some money?||BlueVine: For when you need access to money quick, fast, and in a hurry
Fundera: Provides term borrowing conditions for extended payback due dates
Kabbage: Get access to a certain amount of money then get a loan matching that amount whenever you want
Reading through and finding out about the different lending services within the business-to-business market can be life-changing for business owners who are low on funds, have no luck in accessing capital through the traditional banking system, and for those who just need the extra help to get by. Operating a business is not just about adequately serving customers and marketing a product. Operating, creating the supply of sales, and building a platform in which to run a business (whether it is an online or a brick-and-mortar store) costs money.
It costs money to make money. Having knowledge about a lending business that caters to the business sector of the market can provide a space for small businesses to get all of their specialized needs met due to a B2B operation having and giving more leeway than a traditional financial institution would. Businesses are rejected from bank loans from everything to oversaturation of the market, bad loaning and credit history, and other discriminatory factors.
By utilizing B2B lending platforms, small businesses get a chance to thrive in a market ravaged by the Covid-19 pandemic and the economic strife that followed it. Larger businesses get the opportunity to “lend” a helping hand by lending out money to businesses in need. Helping a business get by means potentially saving a person’s livelihood and keeping one’s dream alive in an unforgiving and unpredictable financial environment.