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5 Small Business Funding Misconceptions Defeating Your Dreams

Are your misconceptions about small business financing defeating your dreams?: http://www.crowd101.com/2015/04/small-business-funding-misconceptions-defeating-your-dreams/

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We found some powerful small business funding misconceptions leading up to the Manta Small Business Webinar. I have been working with business owners on their plans to raise money through crowdfunding and alternative finance for a few years and thought I had heard all the business funding misconceptions most popularly held. I was wrong. Working with Manta and Highwire Public Relations ahead of the March 19thWebinar on Alternative Funding, a few polls were conducted that uncovered five powerful misconceptions that could be holding a lot of business owners back.

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The survey was conducted online, over the week to February 25th, with 1,287 small business owners who are members of the Manta community and have claimed their business profile. For more information on the Manta Alternative Finance Poll, please contact Manta@highwirepr.comThe first thing that struck me about the poll results was that, while 67% of business owners did not feel they had enough choices for small business funding, only 2% had tried crowdfunding and just 23% had taken out a loan through an alternative lender. Looking further into the responses, we found some deeply-held misconceptions about alternative financing for small businesses.

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Small Business Funding Misconception #1: Sources of alternative business funding seem like a scam

Of the respondents to the survey, 14% said they did not trust alternative lending sources. Peer lending platforms are subject on a continuing basis to a number of

federal and state securities laws including the Securities Act of 1933 that established the registration process with the Securities & Exchange Commission (SEC).

Crowdfunding is also heavily regulated and both the SEC and the Financial Industry Regulatory Authority (FINRA) have taken part in the rule-making process.

Nearly $1.4 billion has been pledged to successful crowdfunding projects on Kickstarter alone.

Is Crowdfunding Promotion a Scam?: http://www.crowd101.com/2015/03/crowdfunding-promotion-scam/

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The alternative finance industry has a very strong incentive to verify campaigns and keep the machine running smoothly. While a handful of crowdfunding campaigns have failed to deliver on rewards, I have yet to hear of any that were outright scams.

Most of these promotion services are based on blasting your message out to a list of thousands that really could care less about your business or crowdfunding campaign.

The only real crowdfunding marketing is that based on the process of building a community and reaching out on a personal level.

Crowdfunding Resources: http://www.crowd101.com/get-featured/

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Small Business Funding Misconception #2: There are too many risks in small alternative funding

Nearly a third of respondents (30%) that used traditional small business funding had not considered alternative financing because they were unsure of the risks involved.

The risks to alternative sources of small business funding are really no different that the risks to traditional financing options.

There is the risk that you might not get your loan or that your crowdfunding campaign might not reach its goal.

The Crowdfunding Business Model and 54 Other Ways to Rule Your Industry: http://www.crowd101.com/2015/03/crowdfunding-business-model/

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Four of every five small business loans being denied at traditional banks

> With alternative lending where only about two-fifths of loans are being denied.

With small business loans from a traditional bank, there’s the risk that you won’t be able to pay the loan and will get the collateral repossessed.

> Most peer loans are made without collateral.

Not being able to pay will still hit your credit score > But you won’t face the risk of someone sitting outside your house with an auction gavel.

Raising More than Money with Crowdfunding Outreach: http://www.crowd101.com/2015/01/raising-more-than-money-with-crowdfunding-outreach/

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Small Business Funding Misconception #3: Alternative business funding platforms are too complicated

The crowdfunding and peer lending platforms have greatly increased their level of customer service.

Applications for peer loans are generally able to be completed in a few hours, even with detailed financial statements for business owners.

One of the biggest reasons why 60% of crowdfunding campaigns fail is because it is so easy to launch a campaign.

The Top 6 Crowdfunding Platforms for Creative Campaigns: http://www.crowd101.com/2014/11/top-6-crowdfunding-platforms-creative-campaigns/

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Few people talk about the process behind a successful crowdfunding campaign.

Crowdfunding can be a lengthy process. You will need to spend between three and five months pre-

launching your campaign.

Plan your campaign out though and a whole new world of marketing exposure and fundraising will be yours for the taking.

Crowdfunding Campaigns Make it Personal: http://www.crowd101.com/2014/12/crowdfunding-campaigns-make-personal-make-impact/

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Small Business Funding Misconception #4: Alternative funding is only for start-ups

Only 30% of the respondents to the poll that had used external funding in the past, needed it for start-up costs. That means 70% of those needing funding for things like infrastructure, new products and cash flow are denying themselves of a viable source of financing.

Best Personal Finance Advice from around the Web: http://www.crowd101.com/2014/12/best-personal-finance-advice-around-web-2/

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Small Business Funding Misconception #5: Crowdfunding is just about the money

Crowdfunding is about much more than the money, in fact, the money is probably the least of the benefits to most small business owners.

Of the respondents to the poll that had tried crowdfunding, 16% reported not reaching their funding goal but that the marketing exposure helped their business. Nearly half of respondents (46%) reported a willingness to consider crowdfunding as part of their marketing strategy if they knew more about it.

Turning Blog Visitors into Crowdfunding Campaign Success: http://www.crowd101.com/2015/02/blog-crowdfunding-campaign-success/

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What if I told … I found an opportunity to find an enthusiastic audience on a website

with more than 13 million visitors a month That you could have a complete page dedicated only to your product

and your message Completely free

…You would probably be skeptical

Crowdfunding is the opportunity to market your business to a massive audience and it’s absolutely free to launch a campaign. It will only cost you time to put the campaign together.

Crowdfunding presents the opportunity to really build a community around your business.

Crowdfunding backers feel a level of buy-in with the campaigns they support and this translates to lifetime cheerleaders for your brand.

Get the Best Bang for Your Crowdfunding Marketing: http://www.crowd101.com/2015/03/crowdfunding-marketing-promotion/