Peer to Peer Crowdfunding Continues to Grow
Funding Circle – a UK based Peer 2 Peer crowdlending platform – has announced that it is expanding the type of organisations it will broker loans for. Till now it has accepted only limited companies but this week will see the arrival of non limited companies, some partnerships and and sole proprietorships, onto the platform.
Funding Circle is one of the platforms that has received an injection of cash from the UK Government through the Business Finance Partnership, underpinning 20% of each eligible loan.
This marks a further development in the potential reach and impact of crowdfunding to boost business growth in a climate of ongoing financial constraint
It is often forgotten, in a media dominated with mention of reward based platforms like Kickstarter andIndiegogo, that Peer 2 Peer lending forms the largest part of the projected $5 Billion crowdfunding sector. It is also often forgotten that a large part of this lending is made up on non interest bearing loans. These are some of the facts that underpin the view that crowdfunding brings people into the financial markets who are, in many cases, motivated by non traditional expectations of return and that understanding and responding to those motivations effectively can be key to a successful campaign.
As our recent report on Crowdfunding in Scotland identified on the whole the traditional and established capital markets are still trying to understand the philosophical and practical roots of crowdfunding as it challenges so many of the established assumptions. But increasingly there is recognition that crowdfunding is beginning to establish itself as a valid and important partner in the capital markets and that it is a case of working with rather than against it.
For organisations and individuals, navigating your way through the complex set of options and considerations to effectively crowdfund or to integrate crowdfunding into a funding plan or strategy is challenging. If you need some help with that process don’t hesitate to get in touch.
Source: Twin Tangibles