Debt crowdfunding Definition
“Debt crowdfunding is lending provided by individuals or other non-financial institutions, usually via a crowdfunding platform, and is available to companies or sole traders and partnerships alike.”
Debt crowdfunding has really moved into the mainstream – Funding Circle, one of the leading platforms was valued at $1bn within just five years of its launch. The debt crowdfunding sector has posted an aggregate compound annual growth of more than 100% over the past three years making it one of the fasted business finance sectors.
So, if you are looking for a way of raising finance, without giving away equity, you could do worse than considering debt crowdfunding platforms such as Funding Circle, Money & Co or Market Invoice which have all helped their share of success stories.
While competition is fierce on debt crowdfunding platforms, possibly more so than any other sector of crowdfunding finance, successful outcome is well worth the effort – last year saw the biggest ever crowdfunded loan to a company outside the property sector, of £1m and figures look set to keep increasing.
Pitching your proposition on a competitive platform
Debt crowdfunding can be particularly competitive though – investors often choose debt crowdfunding platforms above equity crowdfunding because returns are more structured and easier to predict and since such platforms have to be governed by the Financial Conduct Authority, there is more credibility to them.
That is where a company like ours can help – as seasoned investors, funders and lenders, we know what it takes to get your pitch noticed, and we can navigate the complexities of setting interest rates and asking for the right amount of funding from each lender.
Debt crowdfunding is the fastest growing crowdfunding finance sector and a great way to raise finance for high-growth established companies.