Small businesses face challenges in obtaining funding, with loans from financial institutions decreasing 38% over eight years. However, alternative lenders, or alternative lending, have seen approval rates reach 30% in November 2023. These lenders operate online and use digital data sources to analyze applicants' finances and determine creditworthiness. Alternative credit data, such as rent payments, employment history, mobile phone payments, or certain bank account information, can be used to approve loan applications. The Consumer Financial Protection Bureau estimates that 45 million Americans have no credit history or a credit history too thin to generate a credit score, disproportionately affecting Black, Hispanic, and low-income consumers. Alternative lenders are more flexible and more accessible than traditional lenders, providing small loans with higher interest rates. However, alternative lending may not be the best long-term funding option for businesses with bad credit.