While traveling on business back from New Jersey to Tampa recently, a story posted on USA Today caught my attention. The headline read “Money for your business is out there; just get creative”.
I thought, “Ok, let’s see what creative options he is cooking up.” As I read the story, it immediately turned to a book promotion on getting your business funded. I was disappointed in the balance of the story, which shared all the usual forms of funding being referenced such as bank loans, business plan competitions, business incubator organizations, investors and then one jumped out at me. It is rather new and interesting… online peer-to-peer funding. It’s not a well known option by the broader markets, but many in the start-up and small business world have discovered a level of funding that really is unique.
Peer-to-peer lending, or what is now being called “crowd funding,” provides friends, family, community members and various other groups with certain affinity connections to collaborate online, and provide funding for start up ventures, expansion plans and working capital needs.
Most small businesses get started with asking for funds, using savings or running up credit cards. When companies grow strong enough to become credit worthy the banks will consider open lines of credit to fund slower months so that the better months make the up the difference. The larger “Angel” investors usually happen somewhere in between the start-up and the early expansion. Beyond that, you can sell your soil and most controlling shares to Venture Capital or sell out to a larger competitor in the same market space.
Peer-to-peer lending is filling the gap between start-up needs and early expansion depending on the network of peers willing to lend money. In the U.S., we have many wealthy entrepreneurs willing to invest back into someone else’s great idea. Entrepreneurship is contagious. You do it once and you will want to keep doing it over and over again.
So, if you are in the market to start a business, grow a business or need additional resources for a good purpose that has a strong case for success and a return to the investor, check out peer-to-peer lending.
Some of the more commonly known peer-to-peer and now the new up and coming crowd funding web sites include:
Therefore, even in what is a very tough economy right now all you really need is a very good idea for a business that can generate revenue, a “never say die” attitude to succeed is possible to find money to fund your dreams. It all starts with an idea and a focused strategy, knowing along the way you will learn, adapt and achieve your results, with some heartburn along the way. That is part of the journey to success!