Having trouble raising finance for your business?

If your business has a poor credit rating, is highly leveraged or has recently been turned down for bank finance - you may find non-bank finance easier to obtain, more flexible and possibly cheaper. 

What are examples of non traditional financing?

Alternative financing options refer to all the non-traditional methods businesses can use to secure funding outside of bank loans.

Support from family and friends

Family and friends can offer flexible, long-term, and low-cost (or free) credit. You should make sure that both parties clearly understand the terms of any loan. See financing from friends and family.

Venture capital and angel investments

AYou can raise money by selling shares in your business to investors. These investors might be individuals (angel investors) or firms (venture capitalists). They often bring valuable experience and contacts, but they may also want a say in how your business is run. See shares and shareholders and equity finance.

Crowdfunding

Crowdfunding lets you raise small amounts of money from a large number of people. You usually promote your idea online and ask for support through social media and personal networks. This can also help you build a community around your business. See crowdfunding.

Grants

Some organisations and government bodies offer grants to help businesses grow. These don’t need to be repaid, but you may need to complete detailed applications. Grants can help with things like marketing, equipment, or improving your premises. See grants and government support.

Secured financing

You might consider borrowing money using an asset, like your home, as security. This can be risky, as you could lose the asset if your business can’t repay the loan. Credit unions and micro-finance lenders may offer more affordable and flexible options.

Pitch competitions

In a pitch competition, entrepreneurs present their business ideas to a panel to win cash prizes or investment. Each contest has specific rules and participants compete against others. Even without winning, these events offer exposure to venture capital and angel investors. 

Keeping your job

If you’re just starting out, keeping your current job or working part-time can provide a steady income while your business gets off the ground. It’s hard work, but it can reduce financial pressure in the early stages. See start a part-time business.

Review your financial strategy

The important thing to remember is that if you borrow money, always check the terms well. Don't borrow more than you can realistically repay.

If someone has turned down your request for money, review why you haven't been successful. You may need to adjust your business plan or explore other options.

For more information see business financing options - an overview.