Funding your business is challenging, particularly if you are a start-up looking to make your first product. Not to worry – opting for a beginners’ guide to loans may be helpful for your individual business model, considering there’s a variety to choose from to suit different needs. In order to give you some clarity during this trying time, we are going to give you some insight into 5 alternative financing options to help your business thrive.

Crowdfunding

Finding the right finance option for your business can be challenging, especially when the business is in the early stages but with crowdfunding, you can generate the money that you need with ease. Crowdfunding is completed over the internet on websites such as Go-fund me and allows those interested in your product or service to invest. This is beneficial for a start-up business as you are gaining interest in a product all whilst raising the money for the manufacturing process and even the beginnings of a marketing budget.

Business Loans

If you are looking for a more secure way to obtain money for your business, a business loan from the bank is a suitable alternative. Although this can take time for the money to appear in your account, this is a stable way to pay back the money with an interest rate that works for your business.

Investments From Friends And Family

Being the CEO of your own company can be taxing on your finances within the first few months, and for many, it can be challenging to get the money they need. During this time, there is a possibility of gaining investments from friends and family to tide you over until you are able to pay them back. This is an alternative option for those that are suffering from bad credit as banks and other financial lenders may not be willing to lend to a business that is already suffering from bad credit. By borrowing from friends and family, you can then increase your credit score and begin to build a stable foundation in your finances to better your chance at financial loans in the future. This is significant as this allows the business to grow substantially without the risk of being denied funding.

Peer- To- Peer Lending

P2P lending, also known as Peer to Peer lending, is a process where businesses are matched with lenders and borrowers offering a certain amount of money to a business. By making a proposal that works and putting this forward, you can then be matched with lenders that can provide you with what you need at an affordable repayment amount.

Invoice Factoring

The final way that you can generate money for your business is through invoice trading. Although this is not the most popular form of alternative finance, invoice trading could be used in order to budget effectively. This process involves your company selling unpaid invoices online, these are then sold to a financial company who then pays the bulk of the money that you are owed within 48 hours. Once the financial company has then collected the money from the client, you will be paid the rest of the money you are owed helping you to get the money that you need quickly.

With this in mind, there are a number of ways that you can fund your business without having to risk company assets or worsen your financial predicament, allowing you to grow your business gradually whilst keeping your finances in order.