Tag: Crowdfunding

Peer-to-peer lending, also known as P2P lending, is an online system in which individual investors fund loans (or part of a loan) to individual borrowers. Peer lending, also known as market lending, is a growing alternative to traditional lending.

Borrowers and lenders can benefit from this loan system. For example, some borrowers may find personal loans rejected by other lenders. And peer-to-peer lending platforms can be a great alternative to invest in a club for some.  

Image Source: Google

Depending on your loan, you may qualify for a competitive interest rate. But people with lower credit ratings tend to see higher interest rates — sometimes even higher than the annual credit card average.

While there is still a risk, investors can get better returns on P2P loans than some other savings and investment options.

The credit market can also help small business owners. The US Small Business Administration says that "co-lending can be a viable alternative to small business financing".

How do co-loans work?

Loan affiliates use online software to match lenders with potential borrowers. Features vary from platform to platform, but you will find a lot in common. LendingClub, Prosper, and Peerform are the same lenders.

This is the process when you want to borrow money-

• Fill out the application, which may include a credit check.
• See what your interest rate will be if you are approved. If you want to advance, you can take out a loan from the financing stage.
• Wait for investors to review the loan list and decide if they want to fund it.
• Enter the repayment phase when your loan is successfully funded. You will make regular payments throughout the life of the loan.

Fundraising by getting small donations of cash from a large group of individuals is called crowdfunding. It is a really different concept from obtaining access to funding at a bank or other financial institutions. To be prosperous in crowdfunding, you need to remember who your audience is and satisfy it.

Here are a few best practices through to get good P2P investment:

Give your traders distinct levels to donate:

If you're raising money to produce a movie, by way of example, you should think about having levels of participation that include viewing the film, getting email updates from the financers and getting a tour offstage.

Include a video in your pitch:

Have a video/movie in your crowdfunding webpage. Giving prospective investors a means to find out who you are, get a feeling for your passion, and determining what it is you are attempting to do goes a very long way in donation-based crowdfunding.

Have money already committed before you go to the audience:

For prospective new traders to have the confidence to spend in your business, have at least 30 percent of the money you're looking for already increased before you visit the crowd. It's so much about momentum and physiological aspect.

Be active on the internet:

Just how much money you can increase is dependent upon how many prospective investors you are able to reach. Crowdfunding is actually about your social-media network. Ensure you have assembled out your Facebook lovers, your LinkedIn links, your Twitter followers, and your email list. All that is your social money.