5 Nontraditional Ways to Raise Money For Your Small Business

If you’re like many startups and small firms, you might have trouble getting a conventional loan for your business—or you might prefer an arrangement that offers more flexibility. Thankfully, a growing number of alternatives to traditional business loans have emerged in recent years.

It’s important to thoroughly research any fundraising or borrowing opportunity that comes your way, as you don’t want to discover too late that it wasn’t the attractive deal it originally appeared to be. That said, many small companies have turned to alternative funding sources in recent years. Here are five opportunities to consider:

Crowdfunding campaigns

Kickstarter, Indiegogo and similar sites are designed to help businesses and budding entrepreneurs promote their ventures and raise money from individuals, generally anywhere from $1 to $5,000 or more. The sites have different rules and formats, but in general you create a promotional website, set a fundraising goal and then work hard to get the word out about your fundraising campaign. Many of the most successful crowdfunding campaigns offer their “backers” free stuff — for example the product their money is helping to develop — or other enticing gifts. Crowdfunding can be a good option for a business that has a “crowd-pleasing” business model (such as a popular product or service) which the funders are excited to support and see become reality. Keep in mind, though: Don’t crowdfund if you aren’t sure you can follow through on your plans and promises to your backers — as some companies have gotten very bad publicity for that. (Read tips for launching a successful crowdfunding campaign.)

Peer-to-peer lending

Borrowing money from an individual may be more enticing — or at least more feasible — than borrowing from a traditional bank. Sites like LendingClub and Upstart act as a conduit between individual investors looking to generate nice interest income by making loans to other individuals. Business owners can apply for loans, and the sites let the business know whether their loan application is approved. Peer-to-peer (P2P) lending may offer longer terms or lower interest rates than traditional loans, so it may be worth exploring the option.


Startups and small businesses that don’t have access to traditional loans may qualify for microloans of $50,000 or less. Organizations like Kiva and Accion specialize in providing microloans to entrepreneurs often underserved by the traditional lending community.

Home equity loans

If you own a home and have good personal credit, a home equity loan or line of credit (HELOC) can be one of the easiest and fastest ways to borrow money. One caution, however, is you don’t want to borrow against your home if there’s any risk you won’t be able to repay it. If that happened, you could lose your home.

Alternative loans

Depending on the type of business you run, you may be able to use your assets or outstanding invoices to inject more capital into your business. Factoring, for example, involves a business selling its accounts receivable to a third party that then gives the business an upfront payment based on the value of those invoices minus commissions and fees.

Determining the best type of financing arrangement for your business takes some research. But it’s important to remember that traditional banks aren’t necessarily the “go-to” option anymore.

Taking Care of Business

At Office Depot we take care of business. So whether you don’t have time to deal with traditional lenders or just need complementary financing, we have a program that offers fast and flexible solutions.

Office Depot Business Financing, powered by RapidAdvance helps business owners get the financing they need to grow, quickly and seamlessly.



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