Most people think the reasons a small business fails in the first two years involves poor ideas or low-quality products. Those reasons are true. The biggest reason for small business failure is money—or the lack of it. Running a small business take a lot of funds to stay afloat regardless of how good the ideas are.

Traditionally small business owners have relied on funding sources to get by like:

• Credit cards
• Personal savings
• Investors
• The lottery

Traditional funding sources may work, but non-traditional funding sources work better. They aren’t often used by a lot of business owners, so you will probably have a good chance of obtaining funding. These non-traditional funding sources aren’t listed in any specific order:

1. Equity Crowdfunding
Crowdfunding allows you to raise money in small increments from a large number of individuals. Crowdfuning is done via social media or the Internet. This non-traditional funding source is different than angel investing or venture capitalists. There are no investors or buying shares in the company. Most importantly, an owner doesn’t have to repay individuals if the business is successful. The JOBS Act made business equality crowd funding legal under specific conditions in 2013.

2. Certified Business Loans
Certified business loans provide small business owners with the capital needed to purchase fixed assets like machinery. It is able used to promote business development. The loan package is tailored to meet the business owner’s needs. The loan may include the cost of land, furniture or products. Certified loans are different from traditional bank loans. Certified loans finance the entire purchase price or assets, not a portion of the cost. You can obtain a certified loan after receiving an estimated cost of the total business project for opening your business. Most people love certified business loans because they don’t have to go through the hassle of trying to find more than one lending source. The loans are for new and existing small businesses.

certified business loans

3. Merchant Cash Advance
Merchant cash advance is a lump sum of cash given in exchange for a share of the company’s daily credit card receivables. Approval is usually quick and you won’t personally have to guarantee repayment if your business fails. There are some drawbacks to using this funding source. It requires you have a high volume of credit card sales. Also, it may come with an interest rate as high as 80 percent. There is an advantage.

4. Product Crowdfunding
We talked about equity crowdfunding a short time ago. Product crowdfunding is completely different. It still occurs via the Internet. Instead of asking for money from individuals, a business owner can sell products prior to making them. So you can sell your product now and make the money. After the products are made, you can end them to your customers. To be successful in product crowdfunding, you must have an extensive social media campaign to grab buyers’ attention.

5. Sell Products Now, but Produce Later
You’re not into building an extensive social media campaign for product crowdfunding? You still have the same option. You can sell products now and produce them later. Many business owners have built a database and business listings to acquire prospective buyers. The owner then contact the buyers to make the sale. The money is paid now, which is in an infusion of cash. Later, they receive the products.

6. Peer2Peer Loans
Peer2Peer loans, or P2P lending, allows borrowers and lenders to connect in an online marketplace. It’s easier for many business owners to bypass financial institutions and talk directly to the investors lending the capital. Now it does come with a catch. You have to have a credit score higher than 620, be at least 18 years old and have a bank account in the US. The money typically has a 15 percent interest rate. Repayment varies from three to five years.
Just like the other non-traditional lending sources, certified business loans have a plethora of benefits. For instance, this type of loan has simple terms. You don’t have to have a perfect credit score to secure one. The loan is easy to obtain as long as you consistently make sales.