Startup funding traditionally comes from venture capitalists, the pockets of founders and their friends, or bank loans.
But new models are emerging — some of which allow startups to fund one another using alternative lending techniques.
This way, small business and companies can get help with costs before (or totally without) big investors’ money or applying for traditional bank loans.
As we’ve written about previously, alternative lending has become a booming, trillion dollar industry that VCs love.
Here are some of such startups in the business using unique funding strategy that can help other startups grow.
Fundbox[contextly_auto_sidebar id=”EGzU2pTHiaOnhO2hYsmighD9R0Q4eHnY”]This startup — which just received over 40 million dollars in funding — has a simple purpose: clearing unpaid invoices for small businesses for automatic advances in the bank.
This helps small businesses and startups stress less over gaps in cash flow, and focus more on day-to-day options and company growth.
OnDeck offers small business loans ranging from $5,000 to $250,000, and unlike banks, evaluates businesses based on their performance rather than personal credit.
For startups in particular, OnDeck offers credit scores so that they can begin to secure loans.
This startup, which raised $40 million in 2014, is a peer-to-peer lending marketplace that allows regular people to invest in one another. Startups in need of funding can post listings, and allow users to lend an amount of their choosing.
Fundera makes lenders essentially compete to fund small businesses. Startups can choose what kind of loans they want to apply for, compare offers from lenders, and get the capital they need to succeed.