Even though the unemployment rate appears to be decreasing, the economy is still in recovery mode. As a small business owner or entrepreneur, this is especially troubling if you need capital to keep your business afloat. Big banks are not lending money to small businesses and entrepreneurs like they used to and many of us don’t have personal relationships with our local community banks or credit unions. What do you do when you need to raise capital for your business but can’t go through the traditional channels such as banks and credit unions?
Crowdfunding may be your answer. What is crowdfunding? Crowdfunding can be thought of as a pool of common people or potential investors donate money to fund projects. These projects can range in categories from art, film, technology, and more. Crowding funding is not a replacement for traditional bank loans or Small Business Administration loans but rather it is an alternative. Clark Howard did a segment on the crowdfunding source, Kickstarter, and how The Atlanta Symphony was able to obtain funding for an archiving project. If it can work for them, why can’t it work for you?
Of course, each crowdfunding source has specific requirements but all it takes is a little bit of time and effort to find out what those are and whether or not your project meets the requirements. There are some fees involved so with anything do your research before signing up.