In today’s day and time, micro financing might just be the way to go for most businesses since getting a loan might be a trickier proposition than ever. Car, houses, and personal expenses are no longer being funded by banks as easily as they once were, but that’s not the point of this article. The point is that small and even medium sized businesses are finding it increasingly difficult to secure credit as credit lines tighten. All of this is perhaps a part of austerity measures being undertaken by banks, but what when a business needs a cash injection to get themselves some much much needed piece of machinery or raw materials? That’s where micro financing comes into its own.
Don’t get me wrong, banks might still give them the necessary funding, but others might want to consider micro financing as a very viable option for borrowing money. Micro financing requires smaller amounts of money to be disbursed and options such as peer to peer lending are picking up steam. There is the Lending Club and Prosper, both very well recognized in the field of peer to peer lending. But there is another new player on the scene looking to offer help for small businesses and it’s an online business called MicroVentures. In the world of personal and small businesses, peer to peer lending and micro financing has gained a lot of steam, and with good reason too.
Within the next two years, micro financing is slated to be a $1 billion market. What sets MicroVentures apart though is the fact that they look solely at business ventures when doling out their funds. They are the bridge between Venture Capitalists (VC’s) or angel investors and entrepreneurs. This way, small businesses will always have access to the funds that they need to set things up and take it forward. Once an entrepreneur pays a $100 fee and submits their business plan, MicroVentures assesses the viability of your business plan and allows you to complete phase two only if you are approved at the initial stages. The second stage needs a second payment of $250 after which it will be further assessed for viability.
Once approved, potential angel investors can put their money into your business. MicroVentures seems a good idea for businesses that are seeking out fresh funding. Once your project is funded, you can expect the funds to be at your disposal in about two weeks. There’s no guarantee that you will get the funds you need, but it is nice to know that you have options at your disposal.