Thousands of business owners are looking for alternative sources to raise finance for starting or growing their business.
If you’re one of them, in this article you will find main ways to fund your business without a bank loan.
1. Family loan
Relatives and loved ones are more likely to trust you with their money than an outsider, and they will probably demand lower interest and fewer incentives than a commercial organisation.
2. Commercial card
Commercial card is a great way to handle on your day-to-day expenses, boost your cash flow and get more time for the work you love.
3. Small business grant
There are hundreds of government grants available for small businesses. Government grants are available in all kinds of forms – from reduced costs and free equipment, to cash awards to help your new business grow. You can find a list of available grants on GOV.UK website or speak to your local council.
4. Start up loan
Start Up Loan is a government-backed personal loan available to individuals looking to start or grow a business in the UK.
Start Up Loans offer an affordable source of finance to help new and early stage business owners bring their plans to life. You can borrow between £500 and £25,000 with fixed rate interest rate of 6% p.a.
Crowdfunding is a way for people, businesses and charities to raise money. It works through individuals or organisations who invest in (or donate to) crowdfunding projects in return for a potential profit or reward.
6. Peer-to-peer loan
This is a form of borrowing and lending between individuals, or ‘peers’, without a traditional financial institution such as a bank or building society being involved.
7. Angel finance
Business angels, either on their own or as part of an angel network or syndicate, provide business funding in return for equity, but can also provide valuable experience and guidance to a growing business.
8. Invoice finance
Invoice finance is a finance facility provided by an invoice finance lender to help business owners leverage their unpaid invoices giving them an instant cash injection into the business.
9. Asset finance
Asset finance is a type of lending that enables you to access business assets such as equipment, machinery and vehicles without having to buy them upfront.
10. Business loan
Business loan is a sum of money that the lender provides and the borrower pays back, plus interest, over a set period of time.Alternative finance providers are often better aligned to your needs – not only because they can offer less strict criteria than traditional lenders like banks, but also because they can be more flexible.