SMMEs need not feel limited by business loan sources for small business: non-traditional lending is taking off in the UK, and it’s here to stay! In fact, it’s now easier than ever to fund a good idea; however, choosing the best sources of finance for small business is now more challenging due to the range of options available.
A few decades ago, you’d likely need to go through a bank to fund your next business ambition. But things have changed, and today’s bold ideas need fast and flexible funding to match. In a fast-paced world, entrepreneurs and business owners simply can’t afford to wait and wade through red tape before they’re able to get the funding to move their businesses forward.
This is where non-traditional sources of finance for small businesses come in. Technology has enabled small business to find funding from a vast array of sources, instead of only seeking out bank-approved business loans. These alternative sources of businesses funding are typically easier to obtain, with more flexible repayments options and access to faster funding.
Why small businesses need funding
Almost all small business ventures need funding at some point to help the business grow. A non-traditional loan may help you:
- Expand your business
- Invest in advertising
- Invest in marketing
- Manage cash flow
- Invest in additional resources
- Invest in research and development
- Buy new stock
- Expand your premises
The best non-traditional business loan sources for small business include:
- Peer-to-peer lending
- Crowdfunding
- Venture capitalists
- Accelerators
- Incubators
- Business competitions
- Cash advances
- Short-term business loans
The benefits of alternative sources of funding for small businesses
- Flexible – Non-traditional lenders typically don’t have the same regulatory burdens as bank lenders. Alternative sources of finance are more flexible in terms of both the amount they can lend and their repayment terms.
- Fast – Non-traditional sources of finance can often expedite the loan process, which means you get access to funds faster.
- No assets required – Non-bank lenders may not require assets as security.
Click here to find out more about fast business loans from Smarter Business.
Interested to find out more about non-traditional sources of finance? Read our loans guide.