"So, who are your investors?"

If you're in the process of launching a startup, you've probably heard this question a lot lately. Throughout the industry, venture capitalists and angel investors have become the standard, expected route for startup funding.

There are certainly many perks to funding your business through a traditional investor. Obviously, I'm a believer as I've done so myself for both of my business ventures.

But taking the traditional investor route does come at a price-usually in the form of significant equity in your business. And plenty of businesses struggle to find traditional investors, either because of the nature of their product or industry, or because the amount of funding they need isn't compatible with what venture capitalists are looking to invest.

Luckily, there are plenty of other ways to get startup funding outside the traditional venture capitalist approach. Consider trying one of these five alternative options for funding your startup.

1. SBA Loan

The Small Business Administration (SBA) is a federal agency that helps entrepreneurs grow their small businesses through a variety of services, including the facilitation of small business loans.

SBA loans can be used for a large variety of business needs, including working capital, buying equipment or real estate, or even financing the acquisition of another business. And if you're a woman or a minority entrepreneur, an SBA loan may be a particularly good fit, since the agency gives special consideration to business owners from minority backgrounds.

Although the agency itself does not directly lend funds, the SBA acts as a guarantor of certain bank loans, guaranteeing a certain percentage of the loan in an effort to incentivize banks to lend money to small businesses. This guarantee means banks can afford to offer lower down payments, longer payment terms, and more reasonable interest rates to these "riskier" borrowers.

Keep in mind that SBA loans must be approved by both the Small Business Administration and the lending institution, so these applications involve the most paperwork and longest approval times of any funding option-often taking months of processing time before you actually have cash in hand. So if you're looking to fund your business in a hurry, an SBA loan is likely not your best bet.

2. Alternative Loans

Even through the various SBA programs, entrepreneurs with limited credit histories or low credit scores sometimes don't have the best luck. Fortunately, there are a variety of online alternative lenders willing to offer loans to business owners.

Unlike a traditional bank, alternative lenders look at a wide variety of factors when determining your eligibility for a loan. That means you may qualify for a loan with an alternative lender, even if you were denied for a bank loan.

In fact, if your credit rating has been an issue in securing funding, your alternative loan itself might help you in the future. As long as you consistently make your loan payments on time, it can help to improve your credit score, expanding your options for future business credit.

The only issue using an alternative loan to finance your startup is that your time in business might be your biggest obstacle. If you have been in business for a few years, you will have an easier time finding a loan online. However, if you are just getting your venture off the ground, a line of credit from an online lender or an equipment loan (which we discuss next) are probably going to be your best bet

3. Equipment Financing

Do you mainly need funding to purchase equipment for your business? If so, equipment financing may be a great option. You can use a small business equipment loan for virtually any equipment need, from computers to major manufacturing and production equipment.

Equipment financing works similarly to a car loan-the amount you can borrow depends on the price of the equipment. And because the equipment itself acts as collateral for the loan, you likely won't have to put up your own additional collateral.

If a small business equipment loan sounds like the right fit for your needs, consider talking to an alternative lender that specializes in equipment financing, like Balboa.

While almost any small business can qualify for equipment financing, keep in mind that as a new startup, you may be subject to higher rates. Equipment loans typically run at fixed interest rates between 8% and 30%.

4. Product Pre-Sales

Does every person who hears your product pitch go on and on about wanting to buy it?

Do you have potential customers beating down your door, but no capital to fill the demand? If so, product pre-sales may be your perfect funding solution.

Funding your product through pre-sales allows you capitalize on the ease of use of a traditional crowdfunding platform without facing the uncomfortable prospect of asking for free handouts from family and friends.

To fund your business through product pre-sales, you'll simply launch a campaign through Kickstarter, IndieGoGo, or any of the other traditional, non-equity crowdfunding platforms. Only in lieu of the traditional "reward" that most campaigns offer, your customers' reward will be the product itself.

List the price of the product, as well as your expected shipping date. Some enthusiastic customers may even choose to contribute more than your asking price.

Keep in mind that if your production timeline changes, you'll need to keep them up to date on any delays. Remember, these are customers, not just friends handing you $5 or $10. So you need to maintain high standards of customer service, just as you would with any other transaction.

Another benefit of funding through product pre-sales is that it's a natural marketer for your product. If your initial customer-investors have a great experience with you and love your product, you've already started moving the word-of-mouth train in the right direction.

5. Business Credit Card

If you've exhausted your other funding options, you may be considering using a business credit card to fund your startup. While a credit card isn't the same as cash you need to pay for employees or rent on a retail space, it can be a viable option for certain startup needs.

At first, a business credit card may seem like a prime funding choice, especially if you can qualify for a card with a 0% introductory APR. But keep in mind that those introductory rates rarely last long, and can quickly skyrocket to higher than even the most expensive alternative lending options.

So before you pursue a business credit card as your main startup funding option, make sure that you fully understand the rates and can pay your bill on time each month. Otherwise the debt from these cards can quickly snowball out of hand.

We know that debt isn't sexy. It doesn't come with the stereotypical glamour and thrill of a venture capitalist. But if you're hesitant to give away the store with a VC-or you've gone knocking, and traditional investors just haven't been interested in funding your business-keep these alternative funding options in mind.

After all, if your startup scales to a huge success, repaying your debt will ultimately cost you much less than the mountains of equity you'd be giving away to your investors.

Published on: Apr 22, 2015