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Submitted by: Chickie Maxwell

Applying for a loan to begin with can be a difficult process, but going to apply for a loan in a credit market that is very rough can be much more frustrating. Many institutions requirements for applying for a loan have gotten much stricter. Businesses are having the same troubles getting loans to use for equipment, expansion or hiring employees.

Alternatives for Businesses

One very good alternative for getting loans as a business is using trade credit. Trade credit is also the single largest source of lending across the whole world. When you use trade credit, it means that one business is selling goods or services to another business on credit terms. When the business has an established business credit profile and business credit score, they are more likely to get approved, regardless of the credit score of the individual business owner. If you are going to own a business, it is imperative for your business to have a credit profile and score, which includes being in compliance with the lending market.

One more option to look at to apply for a loan is A/R Factoring. If the company has accounts receivable with any other businesses with good history and credit scores, another business can come and buy the receivables at a discount on the future value of the account. This way the business gets money immediately while the factoring company gets paid when the invoices are paid.

The last option for business is for them to use leasing. Many companies need to lease equipment for their business. This way they are not paying for a large item out of pocket, and are therefore saving money to use for other things, making life a little easier in a difficult credit market.

Individuals Looking for a Loan

Everyone has come across a financial emergency at some point in their lives. Many times you are living paycheck to paycheck and do not have the funds you need saved up. You think you might apply for a loan, but in this tough economy, banks have gotten a lot stricter on when and why they will give someone a loan.

An alternative to using the banks is using a payday loan place, of which there are countless companies spread all over the internet. These companies don t go by your credit rating, so if that is low you don t have to worry, either. Most times they will want to have proof that you have a steady job and will require that you have some kind of direct deposit, because repayment of the loan usually comes automatically out of your bank account at pre-determined times. The biggest drawback of taking this kind of loan is the amount they will require you to pay back because they will usually charge you a pretty good chunk of money in order to take the loan.

If you have a trusted friend or family member who is willing and able, it is always possible to take a loan from them as well. The advantage to this is that you probably won t have to pay any interest. You should get whatever you take in writing, however, and set up a timed repayment plan so that both parties involved feel more secure about the loan.

Finally there are lenders that have the ability to make larger loans to individuals. One such source is the Lending Club For Borrowers & Investors. The Lending Club provides loans from $1000 to $35000 depending on a borrowers ability to meet the monthly payment obligations. Lending Club loans can be used for anything including debt consolidation and home improvement projects. The Lending Club is also a great resource for investors who wish to earn a good return by participating in the service.

Before Taking a Loan

Whether you are a business or an individual, there are many variables you should consider before getting any kind of loan in this tough credit market. You have to make sure you have a way to pay the loan back so that you do not get into more trouble. You also want to check all the conditions of the loan before signing any paperwork. Also, consider the repayment time. You don t want to be stuck with an unreasonable amount of time to pay the loan back.

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