Among other alternatives for bypassing the banker, peer-to-peer lending — a funding option in which lenders view funding requests from individual borrowers on an online P2P platform such as Prosper.com and LendingClub.com and then decide whether to make them a loan — is for anyone with poor credit. P2P can provide loans at lower interest rates than a savings account might, according to Forbes.com. Other lending sources are friends and family, gifts and grants.
Friends and family can be viable alternative sources of funding, especially for aspiring entrepreneurs who may be a bad credit risk. While some may be embarrassed to ask, it should be noted that more than 50 percent of business owners have actually received financial help from friends and family, notes Entrepreneur.com. One reason may be that such individuals may rely less on a person's credit scores and more on character and the borrower's beliefs in the business idea.
Another funding option is to seek out gifts and grants. While the search for these types of opportunities may be a challenge, once found, they are well worth the effort. For instance, perhaps a former employer is willing to share office space at no cost, or other business associates may have a service or product that may be of assistance.