At one time, the only way to get funding for your business was to head to the bank. However, these days there are hundreds of different lenders to choose from. Due to tightened lending restrictions, it has also become increasingly difficult to get the funding you need from the bank. However, the good news is there’s lots of non-traditional ways to raise finance for your business.
Here, you’ll discover the top 3 non-traditional ways to raise the money your business needs.
If you’re a start-up, you’re going to find it difficult getting the funding you need; particularly if your credit rating is low, or even non-existent. However, one option which many start-ups are benefiting from is crowdfunding.
Crowdfunding has become extremely popular in recent years. It basically involves a group of investors, rather than one individual investor. They pool together to lend you the full amount that you need. There’s a lot of crowdfunding channels out there and most are willing to take a punt on new businesses. So, if you haven’t considered it, crowdfunding is definitely worth looking into.
If your finance troubles are temporary, a cash advance could be a good option. They’re a type of business loan which enable you to borrow the money you need to tide you over until payday.
You can also find cash advance companies which provide larger sums of money based upon future business plans. So, if you foresee that investing in new equipment would generate much larger profits, you could submit your business plan as a guarantee on returns to the lender.
Many companies do require you to earn a set amount each month in order to qualify for the cash advance. However, if you do qualify the rates are usually very reasonable and can prove a much better alternative to business loans.
Another option is to go down the venture capitalists route. These are basically investors within your industry who help to build up new companies. However, unlike crowdsourcing, these investors do generally want to see that you have high-growth potential. This means, you’ll likely need a solid business plan, along with an exit strategy.
It’s more difficult to get funding from venture capitalists these days. However, if you do have an exit strategy in place and your business is considered to have high-growth potential, you could benefit from receiving large sum investments.
These are just three options you have when it comes to non-traditional finance. Technology has made it possible to find funding from a staggering number of sources. You don’t need a bank to approve a business loan. Simply carry out a quick internet search for any of the methods above and see which one best fits your requirements.