If you're entrepreneurially inclined and have had a good idea in
the last eight months, you may have noticed coming by start-up
capital is a bit difficult at the moment.
In fact, figures released by the OECD this week indicated despite prolonged quantitative easing by the government, bank lending - of the mortgage variety as well as to businesses - is yet to pick up.
If you've begged, borrowed, stolen and cheated everything you can from family, friends and assorted strangers, it's probably time to try something new. Look no further for the three best alternative ways to finance your business: guaranteed to get your business going and keep your dignity intact.
While bank lending is still on a downward trajectory, peer-to-peer lending has never been more popular. P2P lenders work as a sort of eBay for lenders and borrowers - matching up those who wish to lend money with those who need to borrow. Lenders are incentivised because they generally earn far more than they would if they put the money in a savings account - an average of 9.1% - while borrowers who may not necessarily be approved for a bank loan might find it easier to borrow from the service, albeit at a higher interest rate if their credit rating is low. The industry may still be in its infancy - the first, British company Zopa, started in 2005 - but with confidence in banks falling, experts are predicting P2P lending could change the way we use our money.
Originally conceived in Africa as a cheap way to get credit fast, susus are still common in Ghana as a form of microfinance for business owners and entrepreneurs. Susus work by a group of people, all of whom pay a certain amount of money into an account or to a holder each week. Each week, someone gets the entire amount - so if you have 20 people paying £10 a week into a Susu, eventually, you'll get £200. Approach it more slowly - say with 20 people paying £1,000 into an account each month - and you'll clean up on interest as well. Better than saving, because if you need the money immediately, you can ask the group for it, rather than approaching a reluctant bank manager - as long as you're willing to forego your payout later down the line. Of course, you'll have to be patient, and it's a good idea to get a lawyer involved to make sure your liabilities are as limited as possible.
Why not do away with money altogether and start your business by swapping your services or products with other businesses? From the couch-surfing phenomenon to the clothes swap-fests springing up all over the country for cash-strapped fashionistas, swapping is the new spending. Try sites such as LetsLinkUK, which offers community networks to link people who want to swap their skills and goods; and Staffshare, which allows businesses to share their staff members' time with other businesses. If you're serious about swapping, sign up to Bartercard, which allows you to exchange your goods or services with any of its 75,000 members.
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