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How small businesses can take advantage of new sources of finance

How small businesses can take advantage of new sources of finance

Overview

Small businesses are the backbone of the economy, but they often face challenges in accessing financing. Traditional banks have been reluctant to lend to small businesses, and the process of obtaining a loan can be long and complicated. However, there are a number of new sources of finance available to small businesses, which can provide them with the capital they need to grow and succeed. These new sources of finance include online lenders, peer-to-peer lending platforms, and equity crowdfunding.

Online lenders

Online lenders are a relatively new type of lender that provides loans to small businesses through an online platform. These lenders typically have less stringent lending criteria than traditional banks, and they can provide loans more quickly and easily. However, online lenders often charge higher interest rates than traditional banks.

Some of the most popular online lenders for small businesses include:

• Kabbage
• OnDeck
• LendingClub
• Prosper

Peer-to-peer lending platforms

Peer-to-peer lending platforms connect borrowers with investors who are willing to lend money. These platforms typically have lower interest rates than online lenders, and they can provide loans to borrowers with a wider range of credit scores. However, peer-to-peer lending platforms can be more time-consuming than online lenders, and they may not be able to provide loans as quickly.

Some of the most popular peer-to-peer lending platforms for small businesses include:

• LendingClub
• Prosper
• Upstart
• Funding Circle

Equity crowdfunding

Equity crowdfunding allows small businesses to raise capital by selling shares of their company to a large number of investors. This can be a more expensive option than debt financing, but it can also provide small businesses with more flexibility and control over their business.

Some of the most popular equity crowdfunding platforms for small businesses include:

• Wefunder
• SeedInvest
• StartEngine
• Republic

Conclusion

There are a number of new sources of finance available to small businesses, which can provide them with the capital they need to grow and succeed. These new sources of finance include online lenders, peer-to-peer lending platforms, and equity crowdfunding. Each of these financing options has its own advantages and disadvantages, so it is important for small businesses to carefully consider their options before choosing a lender.