Alternative Funding for Your Business

Alternative funding options are ways of financing your business outside of the traditional bank loans or other orthodox financial government schemes. It’s how businesses get financing if they may have poor credit, are rejected from the usually available means or are uncertain about the amount needed for the financing of their ventures.

Over the past few years a good number of possibilities have opened up with online financing options becoming opportunities for alternative financing.

We will explore some of these financing possibilities and how you can access them.

1. Pitch Competitions

These are competitions in which entrepreneurs get the chance to present their ideas to potential investors. They are usually curated for startups and beginning ventures and can be a great way to help you finance your business.

They offer great opportunities not only for getting investors for your business but also getting exposure for your brand.

Applicants are usually selected based on the business concept, skills and ability to execute their ideas.

You can check out How to Pitch Your Business Idea from our previous blog to get tips on how you can make sure you win over investors on your next pitch.

2. Crowdfunding

Crowdfunding is another popular way to access funds for your business. It usually requires one to set up a campaign stating the desired amount of capital that you hope to raise.

After finding the right crowdfunding platform, setting up your campaign and sharing it out on your social media, you are pretty much ready to go.

There are lots of ways to generate a successful campaign through websites such as GoFundMe and Crowdfunder.

3. Government-Backed Loan

 Schemes

These are subsidized loans from the government. They usually offer significantly lower loan rates and favorable repayment options. They are easy to apply once you find an accredited lender.

The advantage of these types of loans is that they usually have high borrowing limits and extremely low interest rates hence making borrowing money much easier and risk-free.

4. Angel Investors

Angel Investors are private or seed investors of high net worth who usually exchange funds for  a stake in a company. An angel investor is usually connected to the company through friends or family networks.

They funnel their own capital into the business at their own discretion. They may also play an advisory role in the affairs of the business depending on the agreement.

Networking events and trade organizations are some great ways to come in touch with angel investors.

5. Business Cash Advances

Here the business Cash advance lender will advance a sum of money over to your business. Then a percentage, for example 15% is deducted from the future sales that is processed on your business card machine. This means in this case 85% of your revenue will go back to your business while the 15% goes to the lender to repay the loan.

Lots of companies offer this type of loan depending on how much you’d want to borrow. It’s best to do a little research on the best offers to ensure you get the best deals possible.