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Startups often struggle to secure funding and as frustrating as it may be – you can understand why. Traditional forms of financing are not exactly designed for financing. From their strict requirements to high cost, startups may need to find alternative lending options. But, do startup alternative lending options exist? 

What is alternative lending?

Alternative lending is an out-of-the-box way to secure funding. It’s highly sought after by startups because of its unique requirements and flexibility. While there’s a degree of risk involved, it can help startups get the funds they need to grow their business. As a startup you’ll need to determine which alternative methods of financing are legitimate and which aren’t. If something sounds too good to be true, it probably is. Try to stick with well-known platforms such as Kickfurther for alternative lending options.

Do alternative lending options exist for startups?

The days of depending on banks for small business loans are long gone. With the rise of technology and startups, alternative funding options are becoming more available.

One popular option is crowdfunding, which allows businesses to raise money from a large pool of investors. For example, sites like Kickstarter and Indiegogo allow businesses to post campaigns and solicit donations from the general public. 

Another option is microlending, which involves borrowing small amounts of money from a large group of people. This type of lending typically has a lower interest rate than traditional loans, making it a more affordable option for startups. In addition, many startups are now turning to venture capitalists for funding. 

While this option requires giving up equity in the company, it can provide the capital needed to get off the ground. 

Lastly, for inventory funding or working capital, you can use platforms such as Kickfurther. Kickfurther connects brands to a community of backers who help fund inventory on consignment and give brands flexibility to pay that back as they receive cash from sales. As a bonus, it’s much cheaper than traditional forms of inventory financing.

As you can see, there are a number of alternative lending options available for startups. With a little research, you should be able to find the perfect option for your business.

Common reasons why startups seek alternative financing

Startups usually have a shorter track record than established businesses, which can make it difficult to secure traditional forms of financing such as bank loans.

 In addition, startups often have yet to generate a steady stream of revenue, making them a riskier investment for lenders. 

As a result, many startups seek alternative sources of financing such as venture capital or angel investors. These investors are typically more willing to take risks on new businesses, and they can provide the necessary capital to help a startup get off the ground.

In addition, startup lending alternative options can help a startup reach its full potential by giving it the resources it needs to grow and scale quickly.

Examples of best alternative lending options

There are a variety of financing options available to small businesses, each with its own set of benefits and drawbacks. Ultimately, the best financing option for a small business will depend on the specific needs and circumstances of the business.

Business line of credit

A business line of credit can give startups access to a revolving line of credit. While this can help cash flow, you’ll probably need collateral to secure the line of credit with.

Inventory financing

Inventory financing can be a good option for businesses with high inventory turnover, as it allows them to free up working capital that would otherwise be tied up in inventory.

Merchant cash advance

Merchant cash advances are a good option for businesses that need funding and can repay the loan using future credit card sales. Merchant cash advances typically have high interest rates, but they offer quick access to capital and flexible repayment terms.

Merchant cash advances are ideal for businesses that have a steady stream of credit card sales, as they provide a quick infusion of cash without the need for collateral. 

Working capital loan

Working capital loans are ideal for businesses that need to cover short-term expenses, such as inventory or payroll. These loans typically have flexible repayment terms and can be paid back over time as the business generates revenue.

P2P Lending

Another option is to take out a loan from a peer-to-peer lending platform such as LendingClub or Prosper. These platforms connect borrowers with investors who are willing to provide loans at competitive rates. 

Bridge loans

Bridge loans are another option for businesses that need financing for a short-term project or goal. Bridge loans typically have higher interest rates than other types of loans, but they can provide the cash needed to help a business bridge the gap between two financing rounds.

Micro Financing

Microfinancing is an increasingly popular option for businesses with limited access to traditional financing, as it offers smaller loans at more affordable rates.

Business credit cards

Finally, you could also consider getting a business credit card. This can be a good way to access financing, as well as earn rewards that can be used to help grow your business. 

Business credit cards can be a convenient way to finance business expenses, but they typically have high interest rates and fees. 

Which alternative lending option is right for your business?

If you’re a small business owner in need of financing, you might be wondering what your best option is. 

Should you apply for a traditional bank loan, or explore one of the many alternative lending options available? There’s no one-size-fits-all answer to this question, as the right choice depends on a number of factors. For example, if you have a strong credit history and are looking for a large amount of money, a bank loan may be the best option. 

However, if you have bad credit or need money quickly, an alternative lender may be a better fit. With so many options available, it’s important to do your research and choose the lender that’s right for your specific needs.

How Kickfurther can help

If you’re a startup owner, you know that one of the most important things for your business is to keep inventory stocked and available. But sometimes, it can be difficult to come up with the funds needed to purchase inventory outright. 

Kickfurther is the world’s first online inventory funding platform that enables companies to access funds that they are unable to acquire through traditional sources. For companies that sell physical products or non-perishable consumables and have revenue between $150k to $15mm over the last 12 months, Kickfurther can help. With Kickfurther you can fund millions of dollars worth of inventory at costs of up to 30% lower than the competition. It gets better though – you don’t pay until you start making sales. You’ll truly have the opportunity to create a payment schedule that works for your business. You’ll outline expected sales periods to create customized payment terms. With more than $100 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours. 

Interested in getting funded on Kickfurther?  Create a free business account, complete the online application, review deals, and get funded in as little as minutes!

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