Briggs AnalyticsAlternatives to business loans: 7 ways to fund your company without debt
In this article
Why owners look past a loanSeven alternativesThe one most owners have not heard ofHow to chooseWhy owners look past a loan
A loan has to be repaid whether the money works or not. Banks want collateral, a few years of profits and usually a personal guarantee from the owners. Interest adds to the cost every month. For a company that needs cash for a slow season, a new hire or a move into a new market, that can be the wrong shape of money.
Seven alternatives
- Customer prepayments. Offer a discount for paying a year up front. You get the cash now and owe the work later.
- Grants. Federal research grants such as SBIR and STTR, plus state and local grants. Free money, but slow and competitive.
- Tax credits. The federal R&D credit lowers taxes for companies doing qualified research, and some small companies can apply it against payroll taxes.
- Selling unused assets. Equipment, vehicles or space you no longer need.
- Licensing your operational data. AI companies pay for copies of real business records. More on this below.
- Revenue-based financing. You repay from a share of monthly revenue until a set amount is paid back. Not a classic loan, but it is still money you pay back.
- A partner or investor. No repayments, but you give up part of the company.
The one most owners have not heard of
Your company has spent years recording how it works: jobs quoted and finished, tickets opened and solved, deals won and lost. AI companies now pay to license copies of records like these. You keep the originals and the business, and nothing has to be repaid.
The public examples are large. Reddit disclosed $203 million in data licensing contracts (SEC filing), and Google bid $10 million for Spirit Airlines' records (Business Insider). For most companies the number is smaller and depends on how many people you have, how many years of history and which systems hold it.
See what your company's operational data could be worth.
Free estimate · about 2 minutes · no files required · no obligation
Get my estimate →How to choose
| If you need | Look at |
|---|---|
| Cash this month | Customer prepayments, selling unused assets |
| Money that never has to be repaid | Grants, tax credits, licensing your data |
| Money that grows with sales | Revenue-based financing |
| A large amount for a big bet | A partner or investor, or a loan after all |
Talk to your accountant and your lawyer before you commit to any of them. Briggs Analytics is not a lender, a law firm or a financial advisor.
In short
- You can fund a company without debt by getting paid earlier, getting paid for what you own, or getting money that is not repaid.
- Prepayments, grants, tax credits, unused assets and licensing your data all avoid a loan.
- Licensing a copy of your operational data keeps the originals with you and has nothing to repay.
- Check with your accountant and lawyer first.
Questions owners ask.
What is the fastest alternative to a business loan?
Customer prepayments and selling unused assets can turn into cash in days or weeks. Grants take months.
Do I need good credit to license my company's data?
No. The amount depends on your records, not your credit score.
Is revenue-based financing a loan?
It is usually structured differently from a loan, but you still pay it back from revenue, so treat it like debt when you plan.
Can I combine these?
Yes. Many owners stack two or three, for example a prepayment deal plus a data license.
