Alternative Sources for Business Funding

As much as we’re actively involved in the financial sector and in fact operate near the heart of the industry, there are certain areas which are beyond our reach, such as perhaps acting as a direct source of business funding or funding of any sort. We’re by no means a lender and in fact we kind of have an apprehensive view on the common lending principles deployed by the traditional lenders. They’re not really in the business of helping you succeed, but are rather in the business of making the easiest money off of you, which is money generated through lending you some capital to be paid back with interest.

So whenever any of our clients come to us to consult on how best to go about getting funding for their business, naturally a traditional business loan from a bank is the last resort. A bank loan is never completely off the table however, but given the manner in which banks insist on handling such business relationships, nobody can be faulted for resorting to them as the absolute last option.

We’ll revisit the banks in a moment though, by way of exploring why they’re a last resort for seeking business funding and by way of when one would look to the banks since they do indeed have some advantages. For now though, focus turns to the meat of the matter, which is that of alternative sources from which to seek business funding.


Admittedly the crowd-funding scene seems to have died down a bit by way of funders who are willing to just take a little bit of money out of their pockets and help a complete stranger get their business off the ground. It’s still an option however and with the right approach you can get your business venture funded through a crowd-funding campaign. The beauty of crowd-sourced funding is that you retain full ownership of the business and are under no obligations to move the business in a direction dictated to by shareholders as there won’t be any. All you’ll probably have to do is offer some sort of reward to the prospective crowd-funders, like a freebie of the product you’re developing or something along those lines.

R&D Grants

As is the case with crowd-sourced funding for your business venture, Research & Development grants won’t require you to pay back the money given to you to start your business. Normally R&D grants are disbursed by the government, with the catch often being that of you required to develop your business in a specified direction. The aim is for you to develop a product or service or solve a problem with a solution which the government itself would want to buy, ordinarily to aid the masses as part of their governing mandate.

Revisiting the Banks

A business loan from a bank is very difficult to get and you pretty much have to provide the surety of something like a full-time job in order to get approved for the loan. Since it’s a loan, it’ll definitely have to be paid back with interest, which is another disadvantage, but the advantage of a business bank loan is that of the risk implied to be low in the case that you’re approved for a loan. Banks don’t take risks and so if they approve your business plan it means they believe your business is going to work out.