Member Article

Crowdfunding: the answer to your funding problems

Nick Moules is marketing and communications manager for rebuildingsociety, a Leeds-based peer-to-peer lending platform that has created 80 loans for UK businesses, funded exclusively by private individuals, who lend between £10 and £100,000.

Dealing with an order that has come out of the blue can present a fantastic opportunity for a company, but when payment terms with other customers are long and cashflow is tight, sometimes the order can’t be fulfilled and business slips by.

Working capital is just one of the reasons why businesses are choosing to use alternative finance – it was created by business owners that understand the pressures of running a company.

They’ve designed it to tackle the problems presented by bank finance: alternative finance is fast (weeks not months), there is no early repayment charge and there is no discrimination against a particular sector or geographic location, as the funding decisions rest with individuals from all walks of life around the UK.

We’re living in an age of innovation in business finance and there’s nothing more innovative or straight-forward than crowdfunding and peer-to-peer lending, to help companies grow.

Crowdfunding or peer-to-peer lending?

Start-up businesses: Equity or reward crowdfunding can help early stage businesses build an investor and customer base without a burdensome loan to repay monthly. Websites in the UK include Crowdcube and Crowdfunder.

More mature businesses: Businesses that are at least two years old can access the peer-to-peer lending market for loans from £25k+. Typical uses for peer-to-peer lending include:

• Working capital
• Refinancing existing debt
• Expansion capital
• Asset purchase

Operators in the UK include rebuildingsociety.com and ThinCats.

Long term options

Perhaps the best part about accessing these types of funding is the legacy.

You’ve engaged people that have a vested interest in the success of your business, so next time you need a loan or one of your lenders is faced with a choice between your service and that of a competitor, they’re likely to support you.

Furthermore, venture capitalists are warming to businesses that have been financed by the crowd. Research is beginning to emerge that shows crowd-funded firms live longer than those without crowd finance and they’re keen to tap into the army of supporters that the business has when marketing new products or potentially floating a successful business.

Nick has also written for The Guardian, you can find his article: ’Technology is finally disrupting financial services’ here.

This was posted in Bdaily's Members' News section by rebuildingsociety.com .