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Every business needs to access capital to do things like fund its initial rollout, purchase inventory, ship components and pay employees, particularly in the early years of operation and especially during the startup stage.
Most business owners will approach the banks for a business loan as a first course of action to access these funds, and many will come away disappointed.
If you find yourself in just that position, don’t panic – all is not lost – you just need to get a bit more creative and think about different ways of raising the money you need. Here are some alternative ways to finance your company that you might want to consider:
Crowdfunding
If you’re in the early stages of starting a business, or even if you’re an established business looking to create a new product, crowdfunding can be an excellent source of capital.
In case you don’t already know, crowdfunding is a way of raising money by asking a large pool of people, usually on the internet to donate a small sum of money, which when combined, will become a large sum of money.
In order to successfully raise money on platforms like Kickstarter and IndieGoGo, you will ideally need to have a product or idea that will appeal to a large pool or people, a creative way of convincing the public to part with their cash and some exciting incentives, but there’s no reason why you can’t succeed if you really want to.
Finance it Yourself
Okay, you might think that using your savings or using a credit card isn’t exactly creative, but there are so many people who don’t even think about it, that it bears mentioning. You might not be able to access the kind of supply chain finance platform for banks & financial institutions that makes keeping your cash flow going and supplying your goods simple, but chances are you have a little putaway or access to a credit card that can tide you over. Don’t dismiss this as an option, especially if it’s unlikely you’ll find credit elsewhere.
Peer-to-Peer Lending
Peer-to-peer lending is very popular right now. Basically, it is a form of obtaining finance from a group of individuals who are looking to invest some of their capital in a business that they believe has potential or which they are passionate about.
The key to securing peer-to-peer finance, as well as having a good idea and a solid business plan, is to think carefully about the unique selling point you have. Many P2P lenders are looking to invest in something close to their heart, so you may need to play up your heritage, your ethics or anything else that could prove a draw to gain their favor. This may take some creative thinking, but it’ll be worth it when you secure the capital you need.
As you can see, being turned down for a traditional business loan doesn’t have to spell the end – far from it! Good luck with your venture.
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