Traditional banks are declining business loans at a rate of approximately 80%. Most of these denials are due to things like credit issues (little, no, or bad credit), lack of collateral, or simply because they don’t provide funding for certain industries or business types. These denials often lead new businesses to financial distress or, even worse, closure due to the fact that they cannot keep the business running without the necessary funds. Most business owners are unaware of the options that are available to them in the form of alternative funding. The internet has brought many new methods of raising and acquiring funds to businesses of every size and niche.


Crowdfunding is a highly effective method of obtaining needed funds for business. It requires the business to showcase a product or service before it is available to public. Many crowdfunding campaigns allow potential customers to get their hands on a product before it hits shelves at a reduced cost. This allows business owners to not only obtain the funds necessary for product development and distribution, it gives them unmatched opportunity for product trials and sampling. Consumers who receive the product are often asked to provide a review of it which can then be used for product launch and marketing. The internet allows businesses to reach a much wider audience and to get the word out with very little cost. There are websites built specifically for this purpose and many businesses find that crowdfunding is all the financial assistance that they need.

Business Loan Brokers

Business loan brokers are a huge asset to businesses of every size. By providing loan applicants with a wide range of loan types, lengths and repayment options, alternative lenders are able to fund many more applications than traditional banks. Business owners will apply for a loan through these alternative lenders and the broker will locate an investor within their network that may be interested in funding this type of business. The added expense of using a business loan broker to obtain funding is often offset by the ease in which the application process is completed. A broker will assist business owners with their application and will go the extra mile to ensure that funding is received. This option is often overlooked due to the fact that alternative lenders get a bad reputation as being crooks and liars. However, if you know what to look for, a business loan broker could be the biggest asset to your business that you can get.

Ask for references– Your loan broker should be able to offer some good references that will help you to see whether they are trustworthy and what types of funding they have been able to provide.
Resume – look closely at your loan broker’s resume. Red flags include: switching agencies often, little or no experience, and poor reference quality. Look for anything that makes you uncomfortable and ask your broker about it.

Check for Reviews – Usually a simple online search will reveal quite a lot about a loan broker. Do some research and take other people’s experiences into consideration before making a decision.
Professionalism – Consider how your broker does business. Is it organized and streamlined? Or do you feel rushed and haphazard? This can give you important clues about their experience and knowledge.


In a peer-to-peer situation, businesses are matched with lenders that provide funding in their specific field or niche. This ensures that funding is received in a timely manner, reduces the application process and builds strong relationships between lender and borrower. Lenders usually come in the form of investors who are looking for an excellent ROI (return on investment) and providing funding in the form of a loan allows them to collect interest and other fees. Peer-to-peer lending scenarios are beneficial to both sides of the transaction in that businesses obtain the funding that they need and investors obtain the ROI that they are seeking.

Government Funding for Business

The government offers funding in the form of loans and grants for businesses that very specific criteria. The availability of business funding often depends upon, the size of the business, the business owner’s race or religion, or the physical location of the business. For example, a business located in a failing area or inner city may be eligible for certain types of government funding while a single mother running a business from her home may qualify for another type of loan. It is advisable that business owners research available government loans and see which ones they qualify for.

Government loans and grants will often be less costly in the long-run than traditional bank loans.
Being turned down for a bank loan does not mean that business owners have to give up or close shop. A little bit of research and thinking outside the box could result in finding better funding options that will cost less and be easier to apply for. Businesses in specific niches are more likely to obtain financial assistance from an alternative funding source than they are from a traditional bank.