Alternative Funding Options Every Entrepreneur Should Know

Alternative Funding Options Every Entrepreneur Should Know
Alternative Funding Options Every Entrepreneur Should Know
October 1, 2016

The sky is becoming wider for small businesses seeking funding because dozens of funding initiatives are opening up as well as new funding websites. Whether your business is a startup, a nonprofit based, high tech, running business in need of expansion, there is a funding option out there for you.

There are three popular websites dedicated to grant

If you are looking for a grant to start a business or breathe life into your already existing business, there are good websites that offer opportunities for grant.

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1. Indiegogo

It is a free website that offers fundraising option to its subscribers. The subscriber will have to create a video showcasing their unique business ideas, goods or services. People can view your idea and contribute to your course. You get to keep any money you raise after the site has taken their commission.

2. RocketHub

The fund you raise here will belong to you even if it is not up to your goal. Joining the site is free just like Indiegogo. You need to give the details about your business for their consideration about the eligibility and prospects of your small business.

3. Peerbackers

The service they render has much in common with RocketHub and Indiegogo. However, you can only keep the funds you raise if you promise to fulfill your target to your backers.

Non-profit organizations have their own fundraising options

Non-profit organizations require more money than business because all their projects need to be backed by money. Getting corporate bodies and companies to partner with them is not always an easy task. Here are a number of funding options they can try.

Read also: A Cash Business Loan might Just be Perfect for a Working Capital

1. Razoo

This fundraising platform was designed exclusively for nonprofit organizations. Established charity organizations and individuals that are on a charity quest are free to join. The site commission is low for organizations and higher for individuals.

2. CrowdRise

They offer tax-deductible donations just like Razoo. Besides the basic membership, there are tiered membership options too. CrowdRise is endorsed by more celebrities which also gives it more media attention.

Those seeking to expand their business can try Kickstarter

Business expansion is one project that is financially involving. Business expansion will mostly lead to increased output and revenue. Businesses that fail to meet up with the financial needs for expansion will suffer stagnation in their business. Expansion seekers can try the following;

1. Kickstarter

This is the most popular crowdfunding site. Your project will be prescreened by Kickstarter before it will be featured on the website. The deal here is that you must offer a product in exchange for the donation you will receive and unless you reach your fundraising goal, you cannot keep the money.

Read also: What You Never Knew about the Small Business Administration Loans

Loan seekers can try any of the following

Financial institutions are very skeptical when it comes to giving out loan to small businesses and startups because they are considered as high risk businesses. Those seeking for loans can try any of the following;

1. Prosper Rating

The loan offered by the site is structured and unsecured. They are one of the leading alternative source of lending, offering from $2,000 to $35,000 with a fixed interest rate and a loan term of between 3 to 5 years depending on your Prosper Rating.

2. Kabbage

This site does not have a crowdfunding dimension as Kabbage itself is the lender making the process faster. They offer short-term cash advances of between $500 and $50,000 to small businesses.

3. Kiva

Kiva partners with microfinance institutions in many third world nations to create loan facility to budding businesses and entrepreneurs. Interested persons can search through the list of Kiva field partners in their locality.

Read also: Looking for Ways to Finance Your Company: Try Asset Based Lending

Article highlights

  • There are different fundraising websites dedicated to different types of business and organizations.
  • Kickstarter is the most popular crowdfunding website.
  • CrowdRise has received wide endorsement from celebrities and has high media attention.
  • Crowdfunding websites will take a certain commission from your earning.
  • Banks do not easily lend to small businesses and startups.
  • Majority of all the crowdfunding websites are free to join.
  • Fundraising options available for small businesses are on the rise.
  • Kiva has microfinance partners in third world countries.
  • Kickstarter will screen your project before featuring it on their website.
  • Razoo is designed solely for nonprofit organizations to raise funds.

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