Alternative Financing Options For SMEs (Other Than Your Bank)


As well as your bank, if you are raising finance then there are other avenues out there to help find funds and supports to finance your business. Here are a few alternative financing options for SMEs (other than your bank):

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Peer to peer lending

The great thing about peer to peer is speed. You can get quick decisions and access to funds within days rather than weeks. What’s more, it’s much more receptive to quirky and tech-led companies because the investors have the insight to recognise the opportunity banks are often blind to.

However to make peer to peer an option you really need to establish a network of mentors. Not necessarily people who have the money to invest themselves, but people who are well connected and can recommend you to associates looking for low-risk, high-return investment opportunities.

Crowd funding

The huge pro to crowd funding is that investors usually just require monetary return. They don’t want to be involved in making the day-to-day business decisions. Which means you can continue to run the business to your rules.

What’s more, the people interested in crowd funding tend to appreciate the zeitgeist: those ideas that seem too much of a gamble for the bank to finance but see risk takers more than happy to pay €1,000 to see if it will come off.

Venture Capital

Venture capitals are currently rich with investors hungry for a slice of the next best thing but who don’t have the time, energy or idea to get something off the ground. Plus, if your plan is strong enough, this route can help you raise millions.

Attracting investment of this kind though comes around to who you know. Venture capitalists hate unsolicited bids. My friend who works in the industry says he’ll look for flaws in every pitch submitted by email. Whereas, if a contact recommends a new start-up, he’ll do all in his power to make it work. So it’s really important that you actively seek well-connected mentors who can open doors.

The one exception to this rule is speed-funding events such as Angels’ Den. This is where you have three minutes to pitch an idea. Very Dragons’ Den, but worth a punt.

Recommended reading: Things You Need to Know About Obtaining Venture Capital Funding

Grants and Supports

Look at what grants and supports are available from your local enterprise board, your regional development commission or Enterprise Ireland. Here's a guide to Grants and Support to Help New Businesses in Ireland.

Bridging Loans

This obviously comes at a premium. But if successful, they can be lucrative for you as well as the funder. Usually the bridging loan company wants their money back within a year. However this gives you time to use the investment and make a difference. 

Third Level Institutes and Research

It's worth investing time to build relationships with Third Level institutions near you. They may be able to access research funding and grants that help you deliver objectives for your business. 

European Funding

Look at available European funding options for businesses. You may be able to access research and other innovation funding to help finance projects. 


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