Posted by: dagmarsands | March 19, 2015

Funding Opportunities for Small Businesses Post-Recession

Manta Tip of the Day:

Finding funding is a normal part of starting or expanding a business, and back in the day, it was handled primarily through banks. But small business lending from banks came to a screeching halt with the financial crash of 2008. And while there’s a bit of a bounce-bank happening, it’s nothing compared to the explosive growth of alternative financing opportunities.

Today, everyone seems to have their fingers all over financing businesses. With lending start-ups completing IPOs and headlines promising funding in 24 hours, the message is that help is just a click away. It can be confusing, and whether or not you’re in the market for funding, it’s important to be aware of what’s happening in the marketplace.

Funding, lending and investing on crowd-based platforms is big news, but industry definitions are inconsistent. Here’s one very basic way to break down the models in play:

Crowd-funded financing models include:
•Rewards-Based/Donation-Based Crowdfunding: Money is pledged to start-up ideas or causes, and awards may be given, but no ownership in the company is received.
•Investment or Equity Crowdfunding: Capital is provided in exchange for a share of a privately-held business or start-up.
•Peer-to-Peer Lending: Connects borrowers and investors online through a marketplace without a banking intermediary.

Each of these models has its own set of benefits and cautions, but there’s no doubt that collectively they’re changing the funding landscape for small businesses.

Dagmar Sands – Real Estate International – International Real Estate Agent


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