Good Alternatives To Bank Loans

Bank loans have always proved to very beneficial in both ways, for the business and for a personal loan. However, some people are not comfortable with the bank’s policies for loan and security of loan. Therefore, they are many who prefer to borrow money from alternative sources or discover alternative options for themselves. Some of these alternatives are mentioned below.

Equity finance

There are two kinds of external financing. One is a debt and the other is equity. Equity financing means that a person will finance your endeavor or invest money in your asset in exchange for equity in that business or asset. With the concept of equity financing, people understand that when they are financing the capital of the business, they are equally likely to suffer from any sort of loss that the business goes through. There are basically two categories of individuals who finance the business, one are called the business angels and the others are called the venture capital firms.

Government packages and grants

Public sector funding is one of the most important aspects of government schemes in European Union. Those kinds of businesses that are not able to secure their loans, even though their venture seems to be viable, are more likely to receive government schemes or grants. Mostly the areas funded by the government are employment and the training activities, environmentalist activities and research and development.

Working capital

It is another option for people looking to start a business without any bank loans. They can encourage their customers to carry out payment interactions through credit. This means that you can save on your working capital and avoid the need of an external funding.

Credit unions

These are not as big but local organizations. They are becoming popular by the day because of the services they are offering. In order to take advantage of this opportunity, people should register in one of these and be a part of a common bond.


At a time when people are being rejected easily by banks for loan applications, the pawnbrokers are thriving in this aspect. Borrowing Monet from pawnbrokers is no more a dingy business; many people have begun to adopt the services of a pawnbroker for a purpose. The place itself is usually presentable now and people feel encouraged to set up their interactions with them and borrow money from them.

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