As a startup or small business, access to funding is a major barrier that stands between the business and success. It can prove challenging to obtain funding if the business has not made any strides yet, and this is also the reason you need to think about ways to access funding other than pursuing traditional funding options that could otherwise prove too costly to go with, apart from the fact that you might be rejected many times. Here are alternative lending options that small businesses will find effective and easy to go with.

Crowdfunding

Crowdfunding was made popular by several sites including Indiegogo and Kickstarter, and many small businesses have benefitted through this form of raising capital. Basically, crowdfunding is a process where a business requests funds or small investments from friends, relatives, or strangers who help it access funds to implement important ideas. The benefit of this form of funding is that it is like getting funds through goodwill and you will not need to worry about piling up of interest. Obviously, a small business that is not stable yet will find this way of funding ideal and easier to go with.

Micro-financing

If your business is not able to access funding through a traditional bank, then going for micro-financing could look better. Micro-financing is where a business offers financial services to people of low income, and you could lose your business as belonging to this category to access funding from micro-financing institutions. The biggest incentive towards this form of funding is that the interest rate is impressive and you are allowed an ample repayment period, which is something you will not easily accessible if you choose to borrow from a traditional bank.

Merchant cash advance

If your business is already operational and would like to boost production or spur growth, you could finance different projects through merchant cash advance. This is a system where you sell a portion of the future sales to a company or a customer who accepts the agreement. You simply exchange a portion of working capital with a lumpsum. Of course, there are benefits and risks that come with this method of financing and this is why you need to conduct more research to understand how to go about it to prevent scenarios where you take more than your business can repay, thereby risking losing more equity.

Venture capital

Venture capitals are not new and they have been great avenues for start-ups to finance their ideas. What venture capitals do is that they review the kind of business you have then come up with an assessment of future returns. If the returns prove to fall on the positive side, the venture capital then invests in the idea by offering capital and advice where necessary.

The focus of investors like Christopher Ligori & Associates who partner with small businesses through this arrangement is to make profits, and they will do what is required to get the business to succeed, so it is also a perfect opportunity to get expert support on matters like marketing and product design.