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Funding Your Business Without A Bank

Posted 4 months ago

Funding Your Business Without A Bank
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More and more entrepreneurs are getting turned down for business loans as they struggle to prove their viability. If you’re a business owner struggling to access capital via the traditional means you need not worry. With the advent of alternative finance, there are so many new ways to get the financial assistance you need without having to venture anywhere near a high-street banking group. 

Here are some of the alternative ways to finance your business: 

Peer to peer lending

Peer to Peer platforms bring lenders and borrowers together in one space, removing the need for a broker. If you’re looking for funding to grow your business, then P2P lending tends to be quicker and easier than borrowing from a bank. For one it reduces the red tape. If your loan application is approved, you’ll most likely be able to access your finance within weeks. Bank loans may take months. 

To find a P2P lender, visit our dedicated P2P directory. 

Personal credit

We have seen in the past crafty entrepreneurs raising tens of thousands of pounds using 0% interest personal credit cards to get their businesses off the ground. This can be a very economical way to raise unsecured capital. However, you need to be aware of the terms and conditions of your cards, as you may be breaking their terms

Equity Crowdfunding

Equity crowdfunding has been popular since the turn of the century, with many success stories coming from online. If you’re able to craft a decent pitch, a crowdfunding platform may provide quick funding from a host of donors from your friends, family and customers to all over the world.

Better yet, successful crowdfunding campaigns can drive customer loyalty, brand awareness and can also catch the attention of a venture capitalist or high net-worth investor, which could open up even more doors for your business.

To find an equity crowdfunding opportunity, visit our equity crowdfunding page. 

Rewards-based crowdfunding

If you have a prototype or an idea, and you are well-versed at pitching you can start a reward crowdfunding campaign to pre-sell your product or service, giving you the capital to manufacture or provide the good/service. Kickstarter, Indiegogo and Crowdfunder are successful rewards-based crowdfunding platforms. 

Angel investors

An angel investor is a wealthy individual who usually invests in early-stage businesses. Typically this is in exchange for some sort of convertible debt or ownership equity, depending on the terms of the agreement 

Angel investors usually choose a time to invest when few others are willing to put money on the line for an idea, they often offer more than just money. Entrepreneurs themselves who have been very successful in their own businesses feel like they will be able to offer value for your own enterprise. 

If you’re looking to find angel investors, take a look at our dedicated Angel Investors directory to find the right one for you.

Venture capital

Venture capitalists prefer to invest in entrepreneurial businesses. This does not necessarily mean small or new businesses. Rather, it is more about the investment's aspirations and potential for growth, rather than by current size. Such businesses are aiming to grow rapidly to a significant size. A VC usually asks for an equity stake in return for the funding, and funds can be allocated at various stages during the course of a business cycle.

Authors: Oliver Murphy & Sacha Bright

Disclaimer:

To the best of our knowledge, the information we have provided is correct at the time of publishing. SEIS and EIS tax benefits are dependent on your financial circumstances. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed. 





Tagged: Banking Alternative Finance P2P Equity Crowdfunding SME Entrepreneur Business



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