Bank Loan vs. Alternative Lending:

A Simplified Document Comparison for Small Businesses

Meta Description:
Need funding fast? See how alternative lenders slash paperwork vs. traditional banks—no tax returns, collateral, or business plans required.

Securing funding can hinge on the paperwork involved. Traditional banks and alternative lenders have distinct documentation requirements. This guide simplifies both processes, enabling you to quickly identify which option aligns with your business needs.

Documentation Requirements

Traditional Bank Loans

Banks require comprehensive documentation to minimize risk. Typical requirements include:

• Business Plan: A detailed strategy outlining growth, operations, and revenue projections.

• Tax Returns: 2–3 years of both business and personal filings.

• Financial Statements: Including profit/loss reports, balance sheets, and cash flow statements.

• Collateral: Proof of assets (e.g., property or equipment) to secure the loan.

• Credit Score: A minimum score of 680+.

• Debt Schedule: A complete list of existing business debts.

• Approval Time: Generally takes between 2 to 6 weeks.

Alternative Lenders

Alternative lenders focus on speed and simplicity, with streamlined requirements such as:

• Bank Statements: 3–6 months of statements in the business’s name to verify cash flow.

• One-Page Application: Basic business and owner details—no lengthy essays or forms.

Not Required:

• Collateral

• Business plan

• Tax returns

• Detailed revenue reports (beyond basic bank statements)

• Approval Time: Typically between 24 hours and 7 days.