Creative Ways to Finance Business Without Going to the Bank


Some entrepreneurs think that it is the end of the world when a bank doesn’t give them a loan. If banks say no to you, you should think out of the box and choose alternative financing solutions. There are many financial solutions available for small business owners without relying on banks.

When it comes to creative solutions, you should consider user experience and trustworthiness of the lender. Here are some of the ways you can get that funding when going to the bank is not an option:

Revenue-Based Financing

Some alternative lenders offer revenue-based financing tools and tips. They base the monthly repayments on the borrower’s revenue until the money is repaid. The lending company would get a portion of your business’s revenue until you pay off the entire balance.

This type of debt usually has a five-year term. However, businesses can pay back the amount faster if they have money to spare. The amount paid each month can fluctuate, though. Payment is lower when the revenue is low. Payment is higher when the business generates more income. The flexibility helps with the cash flow of the company.

Personal Financing

While you might think that this might not be a creative way of funding your business, you would be surprised at the number of entrepreneurs who haven’t thought about saving money before starting their own business. Some people don’t want to risk their own savings to launch their venture.

Peer-to-Peer Networks

Another alternative to consider is peer-to-peer networks. Instead of borrowing money from traditional financial institutions, the transaction is between two individuals. Several websites offer this type of service.

Borrowers can request a certain amount at a fixed rate and lenders can fund a portion or full amount of the loan. Lenders get back their money over time with interest. It is very important that you have a good credit score to find success through this method.

Credit Cards

Another way to fund your business is with the use of credit cards. You should apply for a business credit card that offers zero interest on transactions made during the first couple of months. Once your company grows, you can repay the amount in full at zero interest. It is like getting free money for that period.

If you opt for this option, you should make sure that you can afford to make the minimum monthly payments. Late payments will cause penalties, as well as damaging your credit rating.

You should also repay the whole amount before the zero-interest rate promo ends. If you still have any balance after the promo period ends, the provider charges interest on the remaining amount.

You can easily get a credit card even if the business doesn’t have a credit history. The best thing about using a personal line of credit is that you retain full control and ownership of the company. Just make sure you pay the minimum amount every month.

Friends and Family

If a bank turns you down, you can go to your friends and family for help. They believe in your project and probably won’t think twice about providing you with the money you need. They don’t care if you have customers or wait to see if your concept works on your target market. Even if you are dealing with someone who trusts you, though, make sure you put the personal loan in writing.

Many entrepreneurs hesitate before borrowing money from loved ones. They fear that not repaying the money on time would destroy their relationships. As long as they can repay the loans on time, there’s nothing to worry about. If that doesn’t suit someone then alternatively you can search for affordable lenders offering short term money via institution such as and get avail for the fund as soon as next day .  

You should also borrow money only from people who can lend the amount to you without risking their own personal finances and make sure that all parties are comfortable with the transaction.

Retirement Fund

If you are confident about your venture, then you might consider using money from your retirement fund. This can be risky, especially if you withdraw all your money from the fund to invest in your business. If the business fails, you not only fail as an entrepreneur, but you are left without any money during your retirement.

You can even combine money drawn from a retirement fund with other funding methods. That way you have more flexibility, and you don’t need to withdraw everything from your savings. Most entrepreneurs choose this option when investing in something they fully control.

Equity Crowdfunding

Several online platforms connect business owners with investors. There’s no need to approach investors and make several pitches if you choose this route. Through the online portals, entrepreneurs can reach several venture capitalists and angel investors at the same time. All you need to do is to put the deal on the platform. Investors can invest in the venture by clicking on a button.

This might probably be the easiest way to raise capital without going to a bank. As long as your idea is interesting, you should find investors in no time. You can input the minimum investment amount, as well as what investors get in return.  

In the past nonprofits, memento rewards, and pre-sales used this type of sourcing. However, the method has spread beyond these investments. There are many people willing to invest in ventures they think will succeed based on the information provided on the website.


Some non-profit organizations and private companies offer small loans for startups that can’t get approval from banks. They offer small loans with better terms and rates. Some examples of microloans are Small Office/Home Office loans and Patriot Express loans.

Seller Financing

Another creative way of funding your business is through seller financing. This option relies on the seller’s inclination to finance a portion of the sale. Through this financial measure, the seller funds a portion of the purchase price in cash and pays the remaining balance in three to five years.

Buyers who have a hard time accessing funds through banks can help offset the upfront costs of inventory through this method. At present, there are many B2B companies offering this type of deal.

When you are starting a business, you need to know all your options in case the bank denies your loan application. While some banks are more lenient towards small businesses, there are still many out there that have policies that are more conservative.  

When the bank says no, you can turn to creative mortgage funding options. Don’t let traditional capital sources hamper the success and growth of your business. Choose any of the many creative ways listed here to fund your venture, and you’ll achieve your goals in no time.