In a recent study conducted by Pepperdine University in partnership with Dun & Bradstreet Credibility Corp, we learned that 44% of small and mid-sized business owners indicated that they thought increased access to capital would be the best way to, "spur" U.S. jobs in 2012
However, for many small business owners, the banks haven’t been stepping up to the plate which has forced business owners to search for alternative forms of financing.
Here are the alternative forms we'll use help get money you need to grow your business.
Crowdfunding is the idea of getting people to fund your business through small investments. These small investments will come with some perk, whether it is a piece of merchandise or some ownership in the company. Several crowdfunding sites are Kickstarter, Indiegogo and Rockethub.
Microfinancing (or sometimes microloans) are small loans for small businesses. The maximum amount for a loan obtained through microfinancing is typically $50,000 while the average loan is between $10,000-$15,000. These loans can help provide the working capital your business needs to succeed without some of the difficulty of obtaining a larger loan.
Angel investors can provide an alternative to banks. These types of investors are more willing to take risks with the businesses they fund while also providing longer loans.
As Steve Strauss mentioned during CredibilityLIVE business incubators are an excellent resource for capital, though it is provided through somewhat indirect means. Business incubator are public/private entities that come together to rent space for discounted rent and legal services among other things. Business incubators provide an opportunity for networking while also having a vested interest in the success of your business.
Venture capital shares some ideas in common with angel investments. However, this type of capital is mostly available to newer businesses with high risk and high reward. For businesses unable to secure a loan from a bank that meet these criteria, venture capital is an option.