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What is Crowdfunding?

Published 08/06/2015 10:00:55

It’s a term which gets branded about fairly frequently at the moment. But not everyone knows what it means.

Obtaining a commercial loan via a crowd-funder, is similar to obtaining a commercial loan via a traditional bank. The difference being that instead of the bank lending you the money directly, the loan is listed on a portal, and individual investors are given the opportunity to provide the loan directly. So instead of having one lender, you borrow the money from several, some of whom may have loaned an amount as little as £10.

The advantage of crowdfunding is that lenders appetites can differ from the main banks, so they may consider funding different projects. They are also constrained by different processes which may be more suitable for some businesses.

So is crowd-funding right for your business?

Well that depends on the nature of your business and what you are looking to do. For any organisation, any type of commercial finance is a bespoke process. The type of finance which is right for you and your business might be very different for another. Which is why at ASC Finance for Business, we arrange an in depth discussion with each business looking for finance, to help understand which finance is right for them, and how best to proceed in applying for finance – be it via crowdfunding, or other means.

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