Have a breakthrough business idea that could change the world and your life at the same instant, but the mere thought of funding might be making you worried and anxious? Imagine getting done with tons of bank approval related paperwork to set your business in motion, spending months nurturing your dream venture and going through all levels of scrutiny to just realise that your business could be rejected funding owing to some seemingly trivial reasons? Or that your loved one may not receive the best medical treatment because they didn’t have enough in savings?
Imagine, if you had a friend who believes in your business idea and is willing to fund your dream venture? Is this real life or is this a pleasant fantasy?
It’s real – Welcome to the world of Crowdlending
Crowdlending aka peer-to-peer funding is the new cool kid in the world of funding. Individuals or businesses can be financed directly by a large number of related and unrelated people without any involvement from any traditional financial institution or a bank. In crowdlending, a large number of people lend small amounts of money for one venture, and usually to one person. In return, the financers/lenders either get a stake in return or some financial gain.
The reasons why businesses consider crowdlending these days :
- Much faster funding than traditional banking
- Advancements in online security has made online transactions hassle free and safe.
- Lower rates of interest as crowdlending usually allows lenders to invest using a reverse-auction model wherein the lender with lowest interest rate gets to invest
- Much more ethical (because low-interest investors have precedence) and transparent in comparison to traditional financing
Wait! There is something even better
Crowdlending can be seen as a subset of crowdsourcing, a model of financing wherein the power of collective is leveraged to acquire funds online through the internet.
While crowdlending is usually possible for businesses that are already set in motion, crowdfunding is more apt for startups and individuals looking to pay for a creative project, or raising funds for medical expenses.
The reason being that crowdlending requires the borrower to return cash in small installments from the very beginning, only companies that generate cash would qualify for crowdfunding. Hence startups can choose crowdfunding, where people who believe in the feasibility or appeal of a business idea can fund the idea. There is risk involved that the venture might not succeed or turn out as hoped for, but this is a risk backers knowingly take.
But what if your breakthrough idea is to ensure financially challenged children gets to stay in school? What if your breakthrough idea is to make a film?
Crowdfunding is your answer to whether you will send financially challenged children to school or give life to your dream film project. For any cause you choose to support, crowdfunding can offer an avenue to raise angel investment.
Crowdfunding has helped patients to get funding for their medical treatments and lead a healthy life.Crowdfunding has helped sports people and teams actualize their dreams of playing at national and international competitions. Crowdfunding has also helped many NGO’s to reach out to more people and offer support.
While there are many crowdfunding platforms available on the internet to choose from, you need to choose that platform whose vision matches that of your business idea.
Crowdfunding offers not only financial support to help people live their dreams but also empowers people with confidence that there are people out there in the world who believe in your dreams too. And isn’t that what we all want – support for our dreams and aspirations?