As this is my very last month in the Entertainment Business Master’s of Science program at Full Sail University I thought it would be best to talk briefly about alternative funding sources for start-up businesses. The instructor in this class mentioned something that resonated with me. He said that “there is more money out there in the world than there are ideas.” Even though there are many people that might have the same idea as yours, it is all about how your idea is executed. However, in order to make any business plan a reality, it is imperative to obtain financing. There are many different ways to obtain these funds such as traditional methods (bank loans, equity financing, etc.), private investors and alternative funding sources. For most, a bank loan will not satisfy the amount desired and a private investor may be hard to come by. Alternative funding sources can be a great resource for those individuals who are seeking financing and have no other place to turn.
There is a bunch of alternative funding sources available on the Internet. Some examples include: www.opportunityfinance.net, www.miroenterpriseworks.org, www.cfed.org, www.eda.gov, and so on. A majority of these sites describe organizations that believe in opportunity financing and the goal of allowing aspiring entrepreneurs to claim their right to living the American dream. One main type of these alternative financing sources found on a majority of these websites are CDFIs. According to the cdfi.org website, “CDFIs are private-sector organizations that attract capital from private and public sources.” These CDFIs are then broken down into different types of categories. For instance, there is a “Microenterprise Development Loan Fund” that is only available for new businesses that foster social and business development. This type of funding is only available for low-income people that are small business owners or self-employed who are unable to access conventional financing. Ultimately, it depends on the impact your company has on your community and the amount of funding you are seeking.
In addition to finding funding sources on these websites, there are also plenty of other types of information. Since there are so start-up businesses trying to enter the marketplace, these sites offer insight into other success stories, global conferences and databases of CDFIs in your area. Furthermore, there is information on how to apply to these types of loans. Overall, these sites are great resources to utilize for when it comes time to financing your start-up business. There can be many advantages to this type of funding such as obtaining lower interest rates or even grants. However, there are some disadvantages. If your business does not contribute towards adding jobs or helping out your local community, it may be hard to gain approval. It all depends on your business plan and the products you are bringing to the marketplace.
