Unconventional Small Business Financing


All small business owners know how important it is to have a financing option or two at the ready to help when things get slow, equipment breaks down, or customers are late with their payments. There are plenty of traditional options available like banks, lenders, and the Small Business Administration. But these aren’t the only avenues for small businesses to access funding.

More and more unconventional options and financial products are becoming available to small businesses and staying informed and types of financial products are out there may give you an advantage in your market.

Merchant Cash Advances

When a business can’t find financing at a typical lending institution, merchant cash advances can be a good option. These are loans borrowed against future credit card sales.

These lending merchants will take a small portion of those credit card sales over a short term as repayment of the loan (plus interest and service fees). These loans are handy in a pinch but do carry some cons for borrowers.


Crowdfunding has taken off over the last decade. It gives businesses looking for capital the opportunity to collect small amounts of money from many people at once.

This can come in exchange for business equity, product or service reward, or repayment. There are even places to access crowdsource funds in exchange for nothing, as a donation.

Often startups or entrepreneurs look to crowdfunding over established businesses, but it is an option if you have a company or product that is likely to get attention in an increasingly crowded space.

Peer-to-Peer Lending

In this model, businesspeople can give or receive loans from other businesspeople. While there are benefits to borrowing from other businesspeople – namely no loss of equity and less red tape – these can come with higher interest rates to cover lender risks.

Business Grants

Grants are hard to find and even harder to qualify for, and they should be. They are, after all, free money. Nonprofits and government-funded NGOs give these grants for various reasons. Some focus on veteran-owned or minority-owned businesses. Other organizations focus on innovative tech startups.

Take the time to look into whether you might be eligible for any of these grants. You may come up empty, but if not, the free funding will have been worth your time.

All of these options carry some risk, often more than the traditional lender products, so be cautious. They also bring some benefits that you won’t find from your bank. Before making any financing decision, do your research. Only you will know what route is best for you and your business.

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