funding

20 Sites to Help You Get a Microloan for Your Startup

The avenues for financing a startup, or even an existing business, have increased exponentially in the last several years.

Here’s a list of twenty possible options for microfinancing. Many of these resources will provide access to financing even to borrowers who have few assets or poor credit, or those who are involved in a high-risk concept.

Microlending for Small Businesses in the US

With micro-lending, funding springs from community-based, nonprofit microfinance organizations.  Such programs often favor business owners from disadvantaged communities and those struggling with limited funds or bad credit.

The Small Business Association (SBA) provides direct funding to non-profit, community-based organizations who then provide loans to entrepreneurs and small business owners. The program expanded with the passage of the 2010 Small Business Jobs Act,  which means a higher limit for loans, $50,000.

The loans can be used for the purchase of inventory, equipment, supplies, and furniture, the money cannot be used to cover debt or make a real estate purchase.

Accion USA – Accion USA is a microfinance community organization offering small business loans up to $50,000.  Interest rates are competitive and the application is free.

Kiva– Kiva operates a peer-to-peer lending portal through which small business owners and entrepreneurs apply for loans by posting their stories.  Those interested in investing make donations of $25 or more. The funds are then pooled till the total amount is reached distributed by way of local microfinancing institutions.

Communities at Work Fund –This program offers loans to Community Development Financial Institution (CDFI) funds that finance small businesses and community service organizations in under-served areas.

You may also try locate a local microlender through search engines such as the Microfinance Gateway or through the Association for Enterprise Opportunity.

Commercial Peer-to-Peer Lending Resources for US Small Businesses

Unlike the microlending programs mentioned above, commercial peer-to-peer lending programs accept only applicants with solid credit. Those who can access this form microlending will see nice interest rates on unsecured financing avoid all the processing, and fees associated with traditional business loans.

Lending Club–  In this program, after you apply for a loan, investors kick in $25 or more till the full amount is reached.  Borrowers can get a personal loan up to $25,000 payable in three years with fixed interest rates.  You can apply online for free.

Prosper.com – Like Lending Club, to borrow at Prosper, business owners must have the credit of an upstanding citizens.  In general, Prosper.com operates a lot like Lending Club, offering personal loans up to $25,000.

Crowdfunding Sites for Small Business Owners and Entrepreneurs

In the crowdfunding model, the online collective builds up funds in support of a project or organization. Thus, the fundee’s credit is no issue.  What can be important is the borrower’s online reputation; what’s definitely  important is the idea behind the funding request. Unlike traditional business financing, money gathered via crowdfunding is not directly repaid. Recipients offer their investors rewards in exchange for their pledge of money.

Kickstarter is perhaps the most well-known crowdfunding site, but several other services exist. Note that many will charge fees on the funds collected, so do your research before submitting a request for funding.

Now, then, a list of the top crowdfunding sites for small business owners:

-Venture Socially- Includes several tools and features to help pitch your project.

-33needs – Affords crowdfunding for social entrepreneurs and for enterprises and businesses with social missions.

-MicroVentures– Targets businesses that create technologies, consumer products, electronics, and web technology.

-Quirky– Does it live up to its name?  Well, the platform offers product designers and inventors a channel for sending their products to market.

-FansNextdoor– This platform is for musicians, writers, artists, etc.  It allows for funding an promotions.  Recent campaigns include a record by Ross Robinson and a book by Benjamin Ledran.

-Cofundos–This one focuses on open-source software projects.

-Indiegogo –Submit any kind of project: creative, social, or entrepreneurial, and get the tools and platform you need to raise funds.

-Growvc– An umbrella for funding engines such as TradeUP, Crowd Valley, and Kapipal

-Rocket Hub– RocketHub is a community with a wide variety of projects; has been featured on TV and is partnering with A&E.

-Peerbackers– Allows entrepreneurs to raise capital from their peers

With a little persistance, small business owners and entrepreneurs can succeed with microfinancing platforms.

Comments

  1. Lovelet says

    Wow, this article is so great. Adam, please do you have any sites fund for Ghanaian start-ups ? Its so difficult to find much detailed fund in Ghana, can you direct me ?? Thank You and hope to hear from you soon.

  2. says

    Hi Adam! That’s a great collection of sites you mention.

    I’d just like to add our own crowdfunding site – Go Get Funding (http://gogetfunding.com). We launched in late 2011 and have helped individuals and businesses raise several thousands of dollars so far. We continue to grow thanks in part to our innovative social features.

    Also, just a note that Profounder (mentioned in your article) is now shutting down.

    All the best!
    Sam

  3. says

    Well, I live in Greece and, if you’re following just a little bit the international news, you should know that it’s not Nigeria — but it is not a “Western Europe” country in the strict sense of the term.

    We’re having this huge financing problem, a great recession going on, and things are getting uglier every day. I really could use a loan to help me write a book and set up a language-learning website (you can read some of it in my blog post below).

    Am I eligible for microfinancing? Which site should I address to get funding?

  4. says

    Thanks for your prompt reply, Adam.

    Unfortunately, as I understand it, this is an institutional channel involving banks, etc — I was thinking strictly crowdfunding, you know, people for people, not banks for interests.

    Anyway, thanks again…

  5. says

    Hello Adam! Great collection of sites you’ve shown.
    I want to start an on-site (mobile) oil change business here in Kansas City, But I have not found anyone to invest in my idea. My reasoning: One, I have no credit history and Two, I have a felony conviction from more than ten years ago. Given the opportunity this WILL be a very successful business because I have a LOVE for this kind of work, determination and will to make it succeed. I also love helping others, My business model will be to serve those in the community that are in need. I just need the funding to go for it! without the collateral punishment. Can you guide me in finding individuals who would be interested in this type of venture?.
    Sincerely
    Sean Bonakies

  6. Adam Gottlieb says

    Hi Sean,

    If you can scrape together the money to start up- even if you have to start up operations on a smaller scale, then you could try asset-based financing later on (ie when you actually have some revenue). I would suggest getting a business cash advance based on either credit card sales alone or your entire revenue stream.

    See this post for more info:
    https://frugalentrepreneur.com/2012/10/confused-by-alternative-finance-10-types-of-alternative-lending-explained/

  7. Steve says

    I really enjoy reading your article. Could you please suggest to us links of micro lending institutions for start ups in Ghana?

  8. Sally says

    Not sure if any of these sites, besides the peer to peers, allow the lenders to charge interest; do you know?

  9. says

    It’s really helped all the new owners to grow. All the sites have very good information. After studying the statement the owners can easily get the finance so that they can invest in their business .
    Small Business loans

Leave a Reply

Your email address will not be published. Required fields are marked *