Small Business Financing

The new type of lending platform for businesses is over the internet. There are three kinds: crowd funding, peer-to-peer lending and cloud lending.

Crowd funding is usually individuals looking to help entrepreneurs raise money to start new businesses or launch new products and services. Three good options are:

  • Indiegogo.com
  • kickstarter.com
  • kiva.com

The downfall to crowd funding is that business owners must raise 100 percent of the money needed in order to receive any of the funding.

Peer-to-peer lending are primarily individual investors looking to earn a healthy return on their money. Two of the biggest are:

  • lendingclub.com
  • prosper.com

Businesses will need to show how they will achieve high returns in order to secure the funding.

Cloud lending is more like bank lending and specialize in making small-business loans of less than $100,000 with easy online applications and fast decisions. The two biggest are:

  • ondeck.com
  • kabbage.com

Though it is easier to get a cloud loan than a bank loan, the interest rates are higher (10%-39.99% APR) and the terms shorter (6 months to 24 months).


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