Alternative sources of finance appear to be of increasing interest to businesses in the UK and beyond that are keen to look beyond the traditional high street lenders in order to expand and further their endeavours. If you’re keen to explore these avenues, it may be that equity crowd funding is the right course of action for you.
There are many benefits to pursuing this as a source of finance, as it means you can often access funding for a project that you may not have got elsewhere. It works by asking a wide range of investors to back the idea, rather than making use of just one lender as a source of financial support and has been used by a huge variety of companies, from salad dressing business Righteous to desk space rental enterprise NearDesk.
What is most interesting about this new way of investing is that anyone can take part – it doesn’t have to be the sole reserve of the wealthy anymore. People can buy shares in new companies and start-ups for just a few pounds, all helping the company in question reach their financial goal. While individuals are not lending cash in in return for interest on a loan, they’re actually buying a part of the company – although, of course, it’s not without risk. If funding targets are not reached, for example, the backers receive nothing.
From a business perspective, it’s certainly worth investigating to see if it can help you raise the cash you need. So if you’ve been turned down by traditional lenders, why not see if crowd investing could be of use