The new year holds much promise for lenders and small businesses borrowing through the medium of crowdfunding. We welcome this enlightened article in the Daily Telegraph, which focuses largely on our friends on the other side of the crowdfunding fence, in equity raises.
"Whatever 2016 brings, one thing will remain true: the biggest challenge for entrepreneurs and owners of small and medium-sized enterprises (SMEs) is to find the funds they need to launch and grow their business.
"As a result, more companies than ever are turning towards smart investments as opposed to traditional loans from private investors or the bank.
"The 'alternative finance' market has doubled in the past 12 months and this pace is expected to continue in 2016, according to research by Nesta, a charity that works to increase innovation in the UK.
"Crowdfunding - asking the public to fund a new project or business via a website - is just one way that companies use technology to get a cash injection and is about to get a boost in the new year.
"Nesta found that last year business lending via crowdfunding and peer-to-peer platforms (a similar innovation but with more stringent credit checks), doubled to more than £3.4bn for British SMEs and start-ups.
We do however disagree with the article's terminology. The piece continues: "But peer-to-peer, rather than crowdfunding, is expected to remain the most popular form of "smart" business lending. The vast majority – around 70 per cent – of money lent to UK business via alternative finance platforms is via peer-to-peer."
The lending that Money&Co. and its peer-to-peer colleagues facilitate is the debt sub-sector of crowdfunding. The equity and project sectors are separate activities, and both are sub-sectors of crowdfunding.
P2P Crowdfunding with Money&Co.
At Money&Co. we bring individual lenders together with small and medium-sized enterprises (SMEs) looking for funding. It's called peer-to-peer (P2P) business lending. Would-be borrowers should click here. Facts and tips about crowdfunding in general are available by reading our knowledge hub, here.
To learn more about getting good returns on capital potential lenders should click here. Remember, when lending your capital is at risk – please read the warnings on our Home, Lend and Frequently Asked Questions pages.
We shall have a new loan on site soon. Meanwhile, check out our Lend page to discover lenders who want to sell on their income streams.