Great Ways to Fund a Small Business

One of the most obvious ways to get extra money you do not have is taking out a bank loan.

However, there are ways to fund your small business without a bank loan!

Banks can provide loans based upon your income and credit, and it can be exactly what you need to afford rent, supplies, and employees to make your business really take off.

However, many people do not like the long approval process they have to go through to get one, and others simply cannot get a loan from a bank because their poor credit prevents them from qualifying at all.

What do you do when you have a brilliant business plan and cannot get a bank loan? You have many options!

Crowdfunding

Crowdfunding websites like Crowdcube and Kickstarter give private individuals a chance to take charge and raise the money through their own marketing efforts.

This is perfect if you are one of those people who really likes to be in control of their finances and how their money is used to find their business. 

You also do not have to worry about causing rifts between family or friends over money, nor do you have to worry about interest rates on a loan.

Peer to Peer Loans

There are many sites online like Funding Circle or Zopa that allow people with a loan need to develop a personal relationship with private lenders online. 

The private lenders set the interest rate and terms for the loan, but they are often open to negotiations, especially if you develop a good relationship with them. Though some do check your credit, you can still get a loan with bad credit if you explain your situation and get lucky with a really sympathetic investor.

Community Development Programs

It is worth checking into your local community for help. Many have programs set in place to help young businesses flourish and can offer you loans or even grants to help your project move forward.

If you are in college, there may be college programs or contests to get money for your start-up. Two friends of mine won third place in their college business contest and won enough money to launch the company the following year!

Family and Friends

You may be lucky enough to have friends or family members who believe in your business dream and have some extra cash to burn. 

They can either loan you the money or give it to you freely as a gift. Because of their relationship with you, you might not have to worry about paying interest on the loan and have some flexibility as to when you pay it back.

Though, borrowing from people you know has disadvantages as well. 

Sometimes they might want a say in how you use the money, or a rift may occur in the relationship if the money isn't paid back on time.

Car Title Loan

You can fund a start-up business without a bank loan by getting a car title loan instead.

Car title lending is a type of asset-lending which allows you to use the title of your vehicle to secure a loan while still getting to drive the car as you pay back the loan. 

Auto title lenders base the amount they give out solely on car value – not credit. That way, you can get the money you need for your small business and even use the loan to build up good credit for the future!

The title lending industry is highly competitive, which is great because it keeps interest rates low and manageable. 

You can get three times as much money with a much lower interest rate through a car title loan than you can through a payday loan or pawn broker. Additionally, you can design a payment plan flexible to your business situation.