What is alternative financing?

Alternative financing refers to financial channels, processes, and instruments that have emerged outside of the traditional finance system such as banks and capital markets. It includes crowdfunding, peer-to-peer lending, merchant cash advances, and more.

These alternative financing methods have gained popularity due to the technological evolution and the increased need for easier access to financing, especially for small businesses and startups. They offer businesses a way to obtain funding that may not be available through traditional means, often through streamlined, digital processes. However, they may carry different risks and costs, and therefore should be considered carefully.