7 alternative sources of capital for entrepreneurs


Funding continues to be a stumbling block for entrepreneurs, especially African-American-owned, with uncertain incomes and unestablished or tainted credit. However, there are more and more alternative sources of start-up and working capital for business owners who need to invest in inventory, facilities, and personnel to establish a strong market presence and generate profitable income.

Need capital to help you start or grow your business? From merchant loans to peer-to-peer loans, here are some alternative financing options.

  1. PayPal working capital. You can borrow up to 8% of your annual PayPal sales. Sites approve funding in minutes. Examines your PayPal history rather than your personal or business credit score and allows you to pay a flat fee with no late or early repayment fees.
  2. Capital OnDeck. Provides financing as quickly as a business day. You must have at least $ 100,000 in annual income and have been in business for at least one year. Can borrow between $ 5,000 and $ 250,000 with 2.5% origination fee. The interest rate is on average around 15% of the total loan amount.
  3. Square capital. To apply, you must be a Square online merchant with earnings over $ 250,000 per year. Money can be deposited into a company’s bank account as early as the next business day. Payment options directly tied to card sales, so merchants can pay more when sales are strong and less if business is slow. Note: Square Capital is a cash advance, not a loan.
  4. Fundraising circle. This program offers loan amounts of $ 25,000 to $ 500,000 over two to five years from investors and institutions. Credit scores, cash flow, and customer reviews are factors in a loan specialist’s approval. The origination fee is 2.99% with interest rates starting at 8.99%.
  5. Loan club. The online application process takes less than five minutes. Borrowers can get up to $ 100,000, with interest rates starting at 5.9% and a payment term of one to five years. Investors select the loans they want to invest in and receive monthly payments from borrowers.
  6. List of angels. This equity-based crowdfunding site is for business angels looking for deals and entrepreneurs looking for capital. He publishes company profiles online to help startups attract investment from accredited angel investors. A typical deal is around $ 250,000 with 70 investors. The carry costs, decided by the main investor, vary from 0% to 20%.
  7. EquityNet. An equity-based crowdfunding platform where startups post their company profiles and present a fundraising campaign to over 20,000 investors who choose which companies to invest in. Basic features are free, but entrepreneurs pay a subscription starting at $ 109 per month to access the EquityNet Investor Network.

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