Where to Find Reliable Funding Sources Outside of Traditional Banking

Starting or growing a business can be challenging, especially when it comes to financing. Traditional banks have been the go-to source for funding, but in recent years, alternative funding sources have grown in popularity, offering more options and flexibility to entrepreneurs. In this article, we explore various funding sources outside of traditional banking, discussing their benefits and how to tap into them. So, let’s dive into the world of alternative funding sources and help you find the right one for your business needs!


One of the most popular alternative funding sources is crowdfunding. It involves raising money for a business or project by collecting small amounts of money from a large number of people, typically through an online platform. The best part? There are various types of crowdfunding to suit your specific needs:

Equity crowdfunding

In this model, investors receive shares of your company in exchange for their funds. Equity crowdfunding platforms like Crowdcube and Seedrs connect startups with investors searching for promising business opportunities. Keep in mind that you’ll be giving up ownership of a portion of your company, so it’s essential to weigh the pros and cons before choosing this route.

Rewards-based crowdfunding

Kickstarter and Indiegogo are well-known rewards-based crowdfunding platforms, where businesses offer products or services to backers in exchange for their contributions. This model is suitable for most startups, especially those with tangible products or creative projects that can result in unique rewards for investors.

Peer-to-peer crowdfunding

Platforms like Funding Circle allow businesses to borrow money directly from a group of individual investors, repaying the loan with interest. This model offers faster funding than traditional bank loans, and the interest rates might be more competitive.

Donation crowdfunding

This model works well for businesses with a social or environmental cause, as it relies on people donating money to the business without expecting anything in return. Sites like GoFundMe are excellent options for donation-based crowdfunding.

Peer-to-Peer Lending

Peer-to-peer (P2P) lending is another form of crowdfunding, but it focuses primarily on loans. P2P lending platforms like LendingClub and Prosper match borrowers with individual investors who are willing to lend money in return for interest payments. With a more straightforward application process than traditional banks and potentially lower interest rates, P2P lending can be an attractive funding source for many businesses.

Infinite Banking Concept Books

If you’re looking to learn more about managing your business finances, it’s a great idea to buy financial planning books that focus on the infinite banking concept. Infinite banking is a method where businesses and individuals essentially become their own bank, offering flexibility and control over their money management. Books like R. Nelson Nash’s “Becoming Your Own Banker” can provide valuable insights into this strategy.

Business Cash Advance

A business cash advance, also known as a merchant cash advance, is a funding option where businesses receive a lump sum of money in exchange for a portion of their future credit card sales. Lenders like Iwoca advance capital to businesses, which then repay the loan, plus a fee, through a percentage of their daily card transactions. This funding source is particularly attractive for businesses with fluctuating revenue, as repayment amounts adjust according to sales volumes.

Invoice Financing

Invoice financing is a popular funding option for businesses that need to bridge cash flow gaps caused by extended invoice payment terms. In this arrangement, businesses sell their outstanding invoices to a financing company for a specific amount in exchange for immediate cash. This can help alleviate cash flow issues and remove the need to chase down late payments. Companies like BlueVine and Fundbox specialize in offering invoice financing services.

Podcast on Infinite Banking

To further your knowledge on financial strategies like infinite banking, consider tuning into a money management podcast. Podcasts can provide insights, advice, and real-life experiences from finance experts and successful entrepreneurs. “The Wealth Without Wall Street Podcast” and “Banking With Life” are two examples of podcasts that discuss infinite banking and other innovative financial strategies.

Asset-Based Lending

Asset-based lending refers to a variety of funding methods where businesses use their assets as collateral to secure funding. The two primary categories of asset-based lending are:

Finance for acquiring assets

This category involves obtaining finance for purchasing or leasing assets like vehicles, machinery, or equipment. Hire purchase and equipment leasing are common forms of asset-based financing that help businesses spread the cost of purchasing assets and ease cash flow.

Asset refinancing

Asset refinance allows businesses to release the value tied up in their assets (like machinery or vehicles) by using them as collateral to secure finance. Business assets act as security for the loan and could be repossessed if you fail to repay the loan. Be sure to explore different lenders and understand the terms and conditions before opting for asset refinancing.

Business Grants

Government and private organizations offer business grants, a form of funding where money is given to businesses without requiring repayment. Grants are available for various purposes, including research and development, community projects, and business growth. The application process can be competitive, so be prepared to demonstrate your business’s value and potential in your application. Resources like the UK government’s business finance support finder can help you identify suitable grants for your needs.

Venture Capital and Angel Investors

For businesses in need of substantial funding, venture capital firms and angel investors can be excellent options. These investors provide funding in exchange for equity in your company and often bring valuable expertise and connections to the table.

Venture capital firms typically invest in high-growth companies, while angel investors are wealthy individuals interested in backing promising startups. Platforms like AngelList and Crunchbase can help you find and connect with suitable investors for your business.

Community Development Finance Institutions (CDFIs)

CDFIs are responsible lenders that provide finance and support to businesses unable to secure funding through mainstream banks. They offer loans at competitive rates, often with flexible terms, and can be an invaluable source of funding for small businesses. To find a CDFI near you, visit the Finding Finance website and search by location and loan type.


Bootstrapping involves funding and growing your business using personal savings, retained profits, and cash generated from operations. This approach is suitable for entrepreneurs who want to maintain control over their business and enjoy the satisfaction of self-reliant growth. Bootstrapping demands resourcefulness, financial savviness, and commitment, but it can lead to lasting success.


As we’ve covered in this article, there are numerous reliable funding sources outside traditional banking for businesses, each with its unique benefits and considerations. By exploring these options and assessing your business’s needs and goals, you can secure the necessary funding to fuel your growth. Commit to researching and understanding these alternatives, and you’ll be better equipped to choose the right funding source to drive your business’s success.