When you have your own business, there comes a time when you need to look into finding a source of funds to accomplish your goals. Most people look into financing when they begin the business and are usually well versed in the normal avenues available. Things like utilizing your own savings, asking friends and family to invest and securing a small business loan from a traditional lender are very common. What happens, though, if you exhaust these paths? Your business doesn’t automatically have to fail if you can find alternative financing methods. These opportunities are available to you both when you start your business and if you find you need an influx of positive cash flow somewhere along the way.

Lines of Credit

Probably the best known among methods of alternative financing, opening a business line of credit is easier if you plan ahead. Applying for a line of credit when you’re already struggling financially guarantees you’ll have both a harder time securing the funding and you won’t be able to get as much as you would if you apply when you’re on solid financial footing. Maintain a good business credit rating and apply for this type of alternative financing when you don’t need it; that way it will be there when you do need it.

Angel Investors

If you’re looking to angel investors as an alternative financing source, you’re more likely to get their attention when you’re starting out. Typically, angel investors are interested in startups, not established businesses. Most investors of this type will front the capital you need for either ownership equity in your startup, a debt repayment agreement or in exchange for common shares.

Venture Capitalists

Among alternative financing sources, venture capitalists tend to be a bit more flexible as to when they invest in a company as compared to angel investors. While angel investors typically invest only in startups, venture capitalists will invest in start-ups, companies in their beginning stages of operation and companies that are considered emerging into their areas of business. The most important quality venture capitalists seek is growth, either in potential or previously demonstrated.

Crowdfunding

Crowdfunding is another method of alternative financing that works well for startups. Rather than asking for large amounts of funds from one or two sources, crowdfunding works by asking for small amounts from a large pool of investors or donators. Many people utilize the internet to post crowdfunding requests on different platforms.

As a funding option, alternative financing could be the answer for which you’re looking.