Alternative finance refers to a broad range of financial instruments and platforms that provide funding outside traditional banking channels. Depending on who you ask, this can include venture debt, crowdfunding, stock financing, and revenue-based financing.
But the term "alternative finance" is increasingly becoming a misnomer. Previously mainly offered by non-bank lenders, today, even traditional banks and financial institutions offer products like venture debt.
Revenue-based financing functions more like an investment than a loan, while crowdfunding is essentially investor matchmaking rather than conventional debt financing. Although these options are rarely offered directly by mainstream banks, some—like UOB—have partnered with platforms such as OurCrowd to offer these solutions indirectly to their SME clients.
Other examples include Funding Societies' partnership with DBS, CapBridge’s tie-up with SGX, and Kilde’s MAS-regulated private debt platform—all part of a growing trend where traditional financial institutions collaborate with alternative finance platforms to meet evolving SME financing needs.
We previously held an event featuring speakers from these different channels to explain how each one works and when businesses should consider them. To learn more, check out our event recap: Financing Options for Your Business Venture — What to Choose and When.