There are quite a few ways to increase your cash flow that don’t involve the services of a banking institution. Whether it’s money for personal use or money to sustain a business, here are a few alternative personal loan options to consider.
Crowdfunding
The term ‘crowdfunding’ encompasses a variety of online fundraising platforms. It simply means you put your request online and ask a ‘crowd’ of people from the internet to help fund your cause. Gofundme, Kickstarter and JustGiving are a couple examples of websites that can help you crowdfund. These companies typically take a portion of the money (about 3%) you raise as a fee for using their services. If you’d like more information on this type of fundraising and the fees associated with it, you can find an excellent article here.
P2P
Jeff Rose from goodfinancialcents.com wrote, “Peer-to-peer lending brings borrowers and investors together on the same websites. Commonly known as “P2P”, it’s an arrangement that “cuts out the middleman”, more commonly known as the banker.” Because you aren’t having to work through a bank to receive a loan, you are getting a much better rate for repayment and investors are getting a higher return on their investment. If you’re interested in finding a loan through peer-to-peer lending, Prableen Bajpai of Investopedia.com compiled a list of the best websites to do so. You can find the article here.
Local Investing Groups
Did you know that there are investing groups all over the country? Business-minded people who love investing come together to meet entrepreneurs and fund the ideas they believe in. (Think shark tank on a much smaller scale.) Although entrepreneurship is a big part of investing, there are also groups for real estate, retirement and day traders to name a few. If you’re interested in finding a group near you, head over to meetup.com by clicking here.
Government Micro Loans
According to an article on blog.credit.com, “The government offers microloans to spur small business creation and expansion. The U.S. Small Business Administration (SBA) has a program that can provide up to $50,000.” If you’d like to check eligibility or apply for one of these loans, find your local SBA office to ensure you meet the requirements.
Family Loan
If there is someone in your family who has some extra cash flow, you may want to ask them to give you a personal loan. Borrowing money from friends and family can be tricky. If it makes you feel more comfortable, write out terms and conditions for the loan. Remember, people have been known to lose relationships for a lot less than money. Don’t be the person who borrows cash and never pays it back. If something comes up that prevents you from paying on time, be honest and openly communicate. Establish a plan and get it done.
Make good financial decisions. Before you head to your bank to ask about taking out a personal loan, do your research to find best options available to you.
A penny saved is a penny earned