Crowdfunding is a relative newcomer to the world of finance, but has proved highly successful for many projects. When used effectively, crowd funding for business can be a fantastic alternative to traditional lending.

Crowdfunding for business

Whereas most finance works by raising a large amount of money from a small number of sources, crowd funding asks many people to contribute a small amount each. There are often simple rewards offered in return for contributions.

In the past, crowdfunding has been used to support community events and activities, artistic projects and the work of good causes. However, it is increasingly being used for business projects, often to great effect.

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Innovative funding solutions

Crowdfunding can be used to establish a new business, expand an existing business, fund a new venture or develop a new service.

It generally uses the internet to engage with as many people as possible. Getting support from potential funders is key to success – they need to buy in to your plans and want to help you make them succeed.

Crowd funding often offers rewards to supporters. For example, a crowdfunded book publisher might offer signed copies to those who contribute a certain amount, or a crowdfunded restaurant may offer a free meal to its
biggest supporters.

Peer to peer lending

While similar to crowd funding, peer to peer (P2P) lending is subtly different. It involves loans being given via an online portal, for a wide range of purposes, but not usually with small contributions from many different sources.

The experts at RedSky can help you to identify whether P2P or crowd funding for business is right for you, compared to other forms of funding. We will then help you to maximise your chances of achieving the funding you need.

For more details, get in touch.
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