Not every business can qualify for a loan from a bank, especially when they start out. However, alternative funding can serve as a way for small businesses to get the financing they need. Here are four places you can go if you don’t qualify for a traditional business loan.


Though technically not alternative funding, the Small Business Administration is designed to assist small businesses in getting the funding that they need. If you’re unable to get a loan from the bank, you should turn to the SBA next. The application process is long, but SBA loans come in all sizes at affordable rates and terms. The SBA itself doesn’t provide loans, but you can peruse their website to see what types of programs they offer. It can be difficult for start-ups to get SBA loans, sometimes, but they have microloans, 7(a) loans, and 504 loans that could be applicable to you.

Alternative Lenders

Alternative lenders make it possible for businesses to get funding quickly and with less stringent requirements. There are many online and private lenders that specialize in supporting small businesses. However, alternative lending often comes with higher interest rates and less affordable terms. When you’re in a bind, alternative lending can be an excellent short-term option. Just make sure you can afford the loan down the road.


Angel investors and venture capitalists are those who use their substantial capital to get involved in small businesses. You can find them online or through networking with other small businesses. To attract investors, you’ll need a thorough business plan to show them. They’ll only invest in you if you have a clear vision for your business. Additionally, not every business structure can benefit from investors. Sole proprietorships and partnerships cannot get money from investors. Most venture capitalists won’t fund LLCs either because of the tax implications.

The Public

Bootstrapping and crowdfunding are classic ways to finance your startup. From events and fundraisers to online collections, you can generate a lot of donations for your business. Plus, using this method also helps with marketing. Using crowdfunding, you may already have a customer base by the time you’re up and running. This will help you start off strong. Over time, you may be able to qualify for traditional loans.

Alternative funding can be a start-up’s saving grace. When you can’t secure a loan from the bank, look towards other financing methods to get your start-up off the ground.