What Are Non-Bank Business Loans?



What Are Non-Bank Business Loans?

When it comes to getting a loan for your small business, it’s imperative that you understand the different loan options available to you. As part of this choice, you should absolutely consider non-bank business loans. But what are non-bank business loans anyway, you might be wondering. What’s more, how can you use non-bank business loans to find the ideal loan solution for your business?

We’ll consider both of these questions and more today to help you find the right option for your firm to pursue; after all, every brand is different. So, why should the loan that you choose to be the same as the ones that every other business takes out? Let us help instead!

What are Non-Bank Business Loans?

First of all, we need to clarify what non-bank business loans are. Indeed, many business owners aren’t actually aware of these unique loan solutions. What’s more, this could mean that you’re missing out on potentially valuable loan options – and signing onto a loan agreement that has terms that aren’t as great as you might like!

As the name suggests, non-bank business loans are offered by a lender who is not a bank. There are many different types of non-bank business loans, and these vary depending on who the lender is. Some loans come in the form of “peer-to-peer loans,” for example, which involve individuals lending money to other individuals. These loans are less appropriate for a business perspective, of course, but they are a good example of how non-bank business loans work.

There are many different reasons why you might want to choose non-bank business loans. As such, you should consider these carefully before deciding which loan solution might be the best one for your brand. Don’t compromise at this stage – taking out the wrong long could come with a huge number of potential consequences. Always consider the different options available to you carefully before making a final decision either way.

Features of Non-Bank Business Loans

What features categorize a non-bank business loan from a standard bank-issued loan? There are a few features you might want to be aware of. These features include the following:

  • Private loan arrangements, negotiated between the lender and the business, that are tailored to your unique requirements
  • Loans are offered by private lenders as opposed to banks, giving them more freedom to provide valuable terms that could save you money or hassle with meeting the loan’s terms
  • Non-bank business loans have simpler application processes than bank business loans, requiring less paperwork and fewer restrictions or limitations.

These are just a few notable features of non-bank business loans that you might want to be aware of. When deciding between a non-bank business loan and a bank business loan, you should consider these. As well as this, you should think carefully about the terms of the loan options and see if you can find an appropriate loan that meets your criteria without being too restrictive or expensive.

Benefits of Non-Bank Business Loans vs. Bank Loans

Before you take out a non-bank business loan, you should take some time to consider the unique benefits that these can offer. Indeed, non-bank business loans rapidly grew in popularity following the 2008 financial crash, with banks becoming much stricter on who they lent to. This popularity has remained strong in the years following this financial crash; as such, you may want to consider the benefits before immediately assuming that a bank loan is the “obvious solution.”

Some of the benefits of non-bank business loans are explained as follows. Of course, it’s worth noting that the specific benefits for your loan will depend on the terms that you are offered. So, always check you’ve picked a reputable and reliable non-bank lender when looking for a non-bank business loan to get the best terms, pricing, and the like.


One of the key benefits of non-bank business loans is that they offer exceptional value-for-money and affordability for businesses. Because non-bank lenders are in a different niche to banks, with lower operating costs and the like, they can often offer more affordable or appreciable rates for your bank loan. Some examples include lower interest rates or a more favorable repayment system.

Less Paperwork and Easier Set-Up Time

Generally speaking, most non-bank loans will have much lesser paperwork requirements. This both saves you time and money and makes the process of applying for a loan much easier, which could be worth considering.

More Varied Options For All Business Credit Scores

If you have been thinking about taking out a business loan, but your business credit score isn’t favorable, you might find it challenging to source a bank loan. However, non-bank business loans could be a suitable option in this scenario. Many non-bank lenders are willing to lend to lower-credit rating businesses, giving you plenty of options even if your credit isn’t ideal.

Specialized Lending for your Business’ Niche

Getting a loan that’s tailored specifically to your business’ niche may be incredibly beneficial. As such, this might be something you’re interested in for your brand – and non-bank lenders may be able to offer this. Some non-bank lenders provide loans that are specialized to a specific business niche. These loans may be more applicable to the unique nature of your business, potentially allowing you to enjoy better terms for the loan.

Lower Revenue Requirements

Due to the financial crash of 2008, most bank loans nowadays require a larger business revenue. However, if your business’ revenue isn’t massive, you may be more limited in the loans banks will offer you. Non-bank lenders may be able to help in this case, though, giving you different loan options despite your brand’s low revenue stream.

Available For New and Established Businesses Alike!

If you approach a bank with a new – or conceptual – business looking for investment, you may have a hard time getting funding. However, non-bank lenders are generally more willing to offer loans for their clients. This is usually irrelevant to the age of your business. So, it doesn’t matter if your business is a fledgling brand or a well-established name; non-bank loan options could be available for you in either case.

Are There Any Drawbacks of Non-Bank Loans for My Business?

It’s safe to say that non-bank business loans can offer a huge number of benefits for your brand. However, no loan solution is perfect, so it’s also essential to consider some possible drawbacks of non-bank business loans before making a decision.

Choosing the Right Loan Can Be Difficult

When it comes to bank loans, you’re largely limited on the different loan options. Your bank will let you know which loans you can benefit from, and you will have to pick from a select pool of banks. However, with non-bank business loans, you will get access to many more loan options.

This is beneficial as it gives you more chance to get an outstanding loan with terms that suit your brand’s needs. However, you need to be highly cautious with non-bank business loans, as the huge number of options can make finding the right one tricky. Always consider every loan offer carefully and scrutinize the terms to ensure you are genuinely getting a good deal on your business loan.

APRs Can Be Higher For Some Loans

Non-bank business loans can offer exceptional affordability if you pick the right ones. However, other non-bank business loans can have higher than expected APRs, so you should always consider this before taking out any loan. Make sure you fully clarify and understand the terms of your loan, too.

Not Every Lender is Reputable

It’s finally worth considering that not every non-bank business lender will be reputable. So, before taking out any loans, take some time to ensure that your chosen business lender will offer great value services without going behind your back. Considering their past reviews and reputation will be helpful in providing you’ve chosen a trustworthy lender for your business loan.

Are Non-Bank Business Loans The Right Option For My Business?

By now, you might be wondering – are non-bank business loans the right option for me, or should I choose a generic bank loan? Well, every business is different, and which option is best will depend on the loan offers you receive.

So, we highly recommend that you consider the potential terms of loan options from different lenders. By comparing the terms available from various lenders, be it a bank lender or a non-bank lender, you will have the best chance at getting a great deal for your business loan needs.

Final Thoughts – Learn More About Non-Bank Business Loans Today!

So, we’ve tried to clarify as many points as possible about non-bank business loans – but if you still have questions, we’re here to help. For us, nothing is as important as helping our clients and business owners just like you to find the ideal solutions for their property. So, don’t compromise. If you need high-quality loan solutions for your brand but don’t know where to start and don’t want to get a bank loan, our team may be able to help you find the ideal solution for all of your bank loan needs.