Let’s get one thing straight: banks don’t lend to start-ups. Any money a bank lends to any firm is either backed by collateral or insured by a guarantor. Banks, especially after 2008, cover their ass, first and foremost. They are not in the habit of handing out free money and taking on risk. Start-ups generally possess the highest degree of risk. As a result, there is a fundamental misalignment of interests and banks won’t lend to start-ups (without collateral).
There’s no such thing as getting money on a risk-free basis, so the questions arises as to how you can minimize the risk that the bank, lender, or investor must incur. Most often this means looking at alternative investment vehicles that focus on small, risky ventures. The most popular of these resources are listed below.