Are you looking for a loan to finance your small business? Banks no longer have the monopoly as the only financing source for companies in Europe and the US. The lack of financing options for small businesses and the self-employed in our country has facilitated the development of alternative ways to obtain financing that has nothing to do with traditional banking institutions.
Business owners are tapping into and exploring new routes of financing their businesses, and banking advancements are taking the financial world by storm. It’s time to hop on the bandwagon and devise strategies for your business, even if it means taking the big plunge in a new direction. By utilizing these tools, chances are your business will grow and increase its returns. All in all, if you dread raising finances for your business, untraditional financing options might be the way to go. Here are five alternative financing options, what they offer, and how they work.
Personal Microcredits Online
Online loans are one of the best financing options to not only finance your business quickly but to do it without so much bureaucracy. These are small loans that can be requested online through platforms such as Credit Cashier and ranging from $50 to $300. This financing option offers flexibility in terms and gives you thirty days to repay the loan from the time the loan is approved and issued. It also has a lower threshold of credit score requirements. While this loan is not large, it is fast and can help you with immediate needs less expensive.
If what you need is not just a small but a more significant investment, from $50,000 to $200,000, you can seek out angel investors. These investors often provide financing, business experience, and contacts that will further your business. Angel investors are professional investors that are both entrepreneurs and philanthropists. In some cases, they invest without expecting a return. Other angel investors will look for some level of return on their investment. These investors tend to finance riskier businesses that other investors and lenders won’t approve.
Crowdfunding is based on a model of mass financing or multiple investor financing. Different people interested in the start-up and promotion of a project become its prominent investors or patrons. In collective financing, the endorsement of the project is through the financing and confidence in it. The internet and social networks make it possible to quickly publicize the business idea, which triggers many potential investors.
The aid of official government or public subsidies that offer grants and loans is another option that is unconventional and outside the traditional banking institutions. This type of financing can boost your business or fund a specific project without paying it back. While these grants or loans are ideal since they are free money, they are difficult to obtain.
Tips When Requesting Financing
To successfully obtain financing for your small business or project, there are a few things to keep in mind.
- A matter of Faith: You must believe in your idea and trust in its success. Convincing investors to finance your business or project will depend on your belief in your business and yourself.
- Time and Dedication: Do not give up after the first rejection. Finding investors and financing is possible, but it is not an issue that happens overnight as it requires a continuous search.
- Initial Financing Plan: This plan accounts for financing needs and available resources. It is usually presented in the form of a table, either through an investment or financing plan or through a complete financial study with cash flow and analysis of key ratios and magnitudes.
- New Technologies: Take advantage of the internet and social networks’ connections to help you find and attract future investors.