Most of the business owners go to commercial banks when they run short of money or need an infusion of cash. But this might not be a good option for a small business owner or entrepreneur. If anyone needs money immediately and is unable to meet the underwriting standards of the bank, what should he do?
Don’t worry, here are some sources from which you can borrow money according to your requirements. Here we are discussing some unique types of Financing that you might not have heard before, and you can pick one that suits best to you:
- Lawsuit Funding:
You can also gain lawsuit funding in case of a personal injury lawsuit. Lawsuit funding is a loan or advance against any future lawsuit settlement or award amount. Lawsuit funding is also known as a lawsuit loan, litigation financing, and settlement funding.
You can easily handle short-term financial hurdles by borrowing money against a future judgment or settlement. It might cost you a bit larger in the long-term. To avoid high costs, you should understand how you will be charged for getting a lawsuit loan.
Lawsuit funding is one of the most unusual funding methods that is offered to the plaintiff, who expect to settle or win a judgment in a lawsuit. Once you file a lawsuit for a personal injury, the lawsuit funding company will determine, after evaluating your case, the amount that you can expect to get if you win.
The lender immediately offers you some amount, and in return, you agree to pay that principal amount, and a funding fee out of your settlement or judgment proceeds. You usually don’t have to pay the lender before your settlement.
If you are searching for a lawsuit loan company, here are the top 5 pre-settlement funding companies:
- Baker Street Funding
- Nova Legal Funding
- Peachtree Financial Solutions
- Oasis Financial
- Momentum Funding
Micro-loans are another type of non-traditional and unusual Financing. As the name depicts, the low amount of loans are awarded by the lender. In some cases, if the entrepreneurs are unable to qualify for the standard mortgage, they turn to micro-loans to meet their financial needs. Some traditional banks and local credit unions also offer micro-loans for small businesses and entrepreneurs.
Crowdfunding – collecting money for starting a business from the population in any amount, including the smallest. The collection is carried out through unique crowdfunding venues, usually representing sites where anyone can put forward their proposal to raise money, and anyone can invest in it with their money. Almost every country has such sites.
Crowdfunding is suitable for the following categories: – for famous people – social projects; – for original projects, for example, the production of very unusual goods; – for projects that you are well advertised. To raise money through a crowdfunding platform, you need to advertise your project very well. Crowdfunding sites are not involved in advertising projects. They only help in collecting money and charge a small commission for their services. Kickstarter and Indiegogo are the two most popular websites for crowdfunding.
- Peer-to-Peer Lending:
Peer-to-Peer Lending also is known as person-to-person lending. It refers to the issuance and receipt of loans by individuals directly, without using traditional financial institutions (banks, credit unions) as an intermediary. Typically, P2P lending is implemented using specific Internet sites where the user can act both as a lender and as a borrower.
There some sites act as an intermediary between borrower and lender in peer-to-peer lending like Funding Circle and Lending Club.
Intermediary companies are organizing P2P lending to receive income from fixed payments from borrowers or in the form of a small percentage of the number of loans collected from both the borrower and the lender.
An attractive part of this lending type is that you can have quick access as some sites offer you to get a P2P loan in just 24 hours.
Rates on P2P loans can be either fixed or determined based on a reverse auction. In the latter case, the potential borrower sets the maximum rate at which he agrees to take a loan, and potential lenders trade among themselves, offering money at a lower price.