A new year is a new chance to put the old ways behind: it’s as true for your personal fitness as it is for the financial fitness of your business. If your business is going to need capital in the new year, an online alternative can be the way to fund it.

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Whether you anticipate needing capital for new equipment or an expansion, there are three main ways to get capital online, in far less time and with far less hassle than going to your bank or credit union:

Peer-to-Peer (P2P) Lending

The P2P business model is starkly different from that of traditional banks. As their name implies, P2P sites began as ways for individuals to borrow from other individuals but now several of the sites have evolved into places where small business owners can borrow from individuals and even institutional investors.

P2P loans are unsecured, so you don’t have to tie up precious collateral, the funding process is faster than a bank and requires less paperwork. Your personal credit score will guide the terms of your funding, but many of these sites have developed their own proprietary scoring so that funders can decide whether they want to help your business.

P2P lending tends to focus on smaller loan amounts, so it might not be your best source for expansion or renovation capital.

Marketplace Lending

Now that P2P sites are also open to institutional funders, the line between P2P and marketplace lending isn’t as clear as it once was. Marketplace lenders have created websites where small businesses can get offers from multiple funders on a wide range of capital needs, from short-term funding to equipment finance and even long-term loans backed by a guarantee from the U.S. Small Business Administration.

Not every option requires collateral and there are even options for business owners with less than perfect credit.

 Crowdfunding  Crowdfunding Crowdfunding is defined as funding of a project via raising smaller denominations of money across a large body of number of people.New businesses that need access to more capital may also conduct crowdfunding. Generally, crowdfunding is performed through an online community, social media, or crowdfunding websites such as Kickstarter, GoFundMe, and RocketHub. Depending upon which jurisdiction an investor resides within will dictate the sort of restrictions that are applied to the crowdfunding process. This determines how much can be invested or which new business may receive the contributions. These restrictions are established to help shield investors from the high risk of losing their investment.Like any other investment, there is a risk of new businesses failing and are similar to those used in hedge fund trading. Why Crowdfunding is Becoming More PopularOne form of crowdfunding that’s becoming more popular would be equity-based crowdfunding, where new businesses can raise capital without losing control to venture capital investors. Crowdfunding has gradually become much more popular and mainstream over the past decade. Private businesses receive much larger amounts of liquidity that is generated by having several or tens of thousands of investors. More shareholders generally correlate to a larger market which in turn creates more liquidity which is what investors seek out when considering equity-based crowdfunding.Both entrepreneurs and investors can significantly benefit from crowdfunding while regulations are continuing to place an increasing role in protecting investor capital.The Securities and Exchange Commission (SEC) is the entity responsible for regulating equity-based crowdfunding in the United States although crowdfunding did not pick up traction until 2011 after President Obama signed the JOBS Act. Crowdfunding is defined as funding of a project via raising smaller denominations of money across a large body of number of people.New businesses that need access to more capital may also conduct crowdfunding. Generally, crowdfunding is performed through an online community, social media, or crowdfunding websites such as Kickstarter, GoFundMe, and RocketHub. Depending upon which jurisdiction an investor resides within will dictate the sort of restrictions that are applied to the crowdfunding process. This determines how much can be invested or which new business may receive the contributions. These restrictions are established to help shield investors from the high risk of losing their investment.Like any other investment, there is a risk of new businesses failing and are similar to those used in hedge fund trading. Why Crowdfunding is Becoming More PopularOne form of crowdfunding that’s becoming more popular would be equity-based crowdfunding, where new businesses can raise capital without losing control to venture capital investors. Crowdfunding has gradually become much more popular and mainstream over the past decade. Private businesses receive much larger amounts of liquidity that is generated by having several or tens of thousands of investors. More shareholders generally correlate to a larger market which in turn creates more liquidity which is what investors seek out when considering equity-based crowdfunding.Both entrepreneurs and investors can significantly benefit from crowdfunding while regulations are continuing to place an increasing role in protecting investor capital.The Securities and Exchange Commission (SEC) is the entity responsible for regulating equity-based crowdfunding in the United States although crowdfunding did not pick up traction until 2011 after President Obama signed the JOBS Act. Read this Term

To fund your business through both P2P and marketplace sites, your business needs to have a bit of a track record, so they are generally not options for  Startup  Startup A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is created by at least one or more entrepreneurs. These seek capital as a means to bypass a limited availability of capital and combat high costs. This is why startups seek funding from funding rounds, crowdfunding, venture capitalists, financial institutions, or other sources. What Makes Startups Successful?Given the fact that most startups fail, the first three years of a startup are critical which is why startup founders require capital for talent acquisition, creating effective business models and plans.In parallel it is important to provide proof-of-concept for the long-term through an established user base and consistent revenue streams. Many startups use seed funding, which occurs during the first stage of funding rounds, where fundraised capital is used to conduct market research and product or service development.Sometimes, startups go through an acquisition process, where they merge larger companies competing in a similar industry. Companies that generate less than $20 million annually, possess less than 80 employees, and are primarily controlled by the founding entrepreneur(s) are generally classified as startups. Today, some of the world’s most successful companies started as startups, such as Facebook, Uber, and SpaceX to name a few. A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is created by at least one or more entrepreneurs. These seek capital as a means to bypass a limited availability of capital and combat high costs. This is why startups seek funding from funding rounds, crowdfunding, venture capitalists, financial institutions, or other sources. What Makes Startups Successful?Given the fact that most startups fail, the first three years of a startup are critical which is why startup founders require capital for talent acquisition, creating effective business models and plans.In parallel it is important to provide proof-of-concept for the long-term through an established user base and consistent revenue streams. Many startups use seed funding, which occurs during the first stage of funding rounds, where fundraised capital is used to conduct market research and product or service development.Sometimes, startups go through an acquisition process, where they merge larger companies competing in a similar industry. Companies that generate less than $20 million annually, possess less than 80 employees, and are primarily controlled by the founding entrepreneur(s) are generally classified as startups. Today, some of the world’s most successful companies started as startups, such as Facebook, Uber, and SpaceX to name a few. Read this Term businesses. To get a new business idea off the ground, you might want to consider crowdfunding.

On a crowdfunding site, you can use words, pictures and even videos to sell people—many of whom won’t know you or your business—on your business idea and include how much you need and what you’ll use the money for.

For example, food entrepreneurs have used crowdfunding to get capital for a food truck, or to move from a truck to a fixed location. Musicians have used crowdfunding to get a single album produced, while game inventors have used it to get their first product out the door.

Also, on many crowdfunding sites, you can offer a gift to funders for their generosity, like a copy of your music or game, and that can help to build a market for your product. But, it can take a lot of time and effort to have a successful crowdfunding campaign, and there are no guarantees that you’ll get the money you need.

Alternative finance is constantly evolving, adding new funding options and funding partners—even funding partners from the world of traditional banking. So if you decide that one of these options is the right one for your business, don’t rule the others out forever. Make a list of the funding you’ll need to grow your business and keep an eye out for your choices.

This article was written by Stephen Sheinbaum, founder of Bizfi, an aggregation marketplace and alternative funding group.