Benefits Of Crowdfunding
We have talked about what crowdfunding is before, now we take a look at the benefits of raising business finance through crowdfunding.
In our opinion there are two main benefits to using crowdfunding to raise business finance, we will now explain why we think these are real benefits over traditional bank finance.
When we look at time cost we mean the amount of time it takes to get a loan decision and the amount of time it takes you to put all the relevant information and accounts together to obtain the decision.
When looking to raise bank finance the time the bank takes to provide a decision is out of your influence.
The real cost sits between what happens to your business pending getting a decision and how much of a distraction providing the necessary information proves.
Crowdfunding is quicker and the information required far less.
A bank will want to see you provide security for your loan where the amount you borrow exceeds £25k, different banks differ but this is a fair guide.
What this means is that if you do not have personal property to provide as security, or do not want the extra cost of the Enterprise Finance Guarantee (EFG) then you will have limited your options, often to the point of not having an option.
Because with crowdfunding you are getting your loan capital from many many people, rather than one person (being the bank) then each investor is taking a lower risk and you can often get up to £100,000 loans without providing security.
If you are considering raising business finance then do look at crowdfunding, talk to us and we will give you the facts, your options, and explain everything to you in simple plain English. Alternatively, watch our short 1 minute video guide here –
If you want to know more about crowdfunding then read our earlier article, contact us via the website or add your comments above.