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Getting Finance For An Internet Business

Times really are a changing!

When I started in business, the way to raise finance was to save up or tap family and friends. The internet has brought us new and innovative ways of finding investors.

First, there was the emergence of Zopa (UK) and Prosper (US) type "social lending" platforms where suppliers and consumers of credit can find partners and settle into happy marriages. At first, lenders were wary. Why would they lend to someone they didn't know? Wasn't that a recipe for losing money? Then they discovered that, like the new generation of platforms for doing business, there was a new generation of protection mechanisms for the online lending market. Investors could choose their return based on the risk they were willing to take and that risk was shared across multiple lenders via clever software. Soon the ones with the money realised that it was a convenient and profitable and far better than salting their funds away in a bank.

If you're an entrepreneur with good credit you didn't need to go to the bank any more. You had places like Zopa and Prosper. But, that wasn't enough. Borrowing money at online markets involved entering into a commitment to paying it back. Because it was, after all, a loan. And the problem with even the most successful entrepreneurs is that not all projects end up profitable, there's no guarantee they'd make the money to meet the repayments. They needed not just a loan partner, but equity investors.

Enter sites like Kickstarter (for creative types and artists), Feed The Muse and SellaBand (for musicians), for journalists and Catwalk Genius (fashion designers). This brought Dragons Den type bidding for and receiving investments based on the quality of the idea and its potential for success. Suddenly now, innovative heads from all over the world have access to make their business ideas and dreams come true! Bad ideas will still fall by the wayside, but good ideas aren't restricted anymore by lack of avenues for finance.

Even business clubs got in on the act by combining their expertise at helping startups with financing from the likes of Zopa as PRIMEbusiness has done. Primebusiness is aimed at over 50s and helps them start business/become self employed. Their partnership with Zopa adds the missing ingredient that opens up new vistas for those enterprising individuals who find themselves out on the corporate redundancy scrap heap.

Such innovative financing options aren't limited to entrepreneurs with high flying, multimillion dollar projects in the developed countries. Microfinancing has seen the loans of small amounts to low income folk from the developing world. From a $100 loan to a goatherder in Mexico to the 5.5 million borrowers to whom ASA lent an average of $110 each, microfinancing is big money. ASA's total disbursement to date is over $5,000 million. The overall impact of services like ASA and Kiva isn't just to attract the right people into business - they have a huge influence on taking people out of poverty, empowering them and improving lives in the third world.

For those entrepreneurs wanting to start technology, mobile and internet based businesses - the type of people who hang out at - there are numerous options, from Venture Capital Funds to Crowdsourcing. Grow VC, like other online venture capital firms, describe their services as Venture Capital 2.0. If traditional outlets don't understand your eBay or Amazon affiliate model and are unwilling to finance working capital requirements, there are the likes of Kabbage.

This is the day and age of new possibilities. Tap into the modern way of financing a startup or the purchase of an existing web business. For further help register on the forums where you can discuss this article with other entrepreneurs and investors.