What is Alternative Funding?
Alternative Funding is finance beyond the traditional – it is an alternative to channels such as banks and capital markets. Demand for alternative sources of financing is increasing.
Several options exist for alternative funding of your business:
- Microfinance: Microfinancing is just a smaller version of a larger traditional bank loan. Designed for small businesses, banks and other lenders offer microloans between $5,000 and $50,000.
- Crowdfunding: raising finance from a large number of people (the ‘crowd’) who are prepared to invest in your business or project.
- Angel Networks: One of the most typical forms of alternative finance for start-ups and early-stage companies is via a group of ‘business angels’. These tend to feature highly-successful, self-made entrepreneurs who look to acquire shares in potentially lucrative early-stage companies using their own funds.
- Private Equity: More common with established companies, private equity investors can help businesses accelerate their growth by expanding into new markets or purchasing competitors to consolidate their position within a sector.
And there are many more alternative finance options available to entrepreneurs and established business owners.