(ThyBlackMan.com) With crowdfunding exploding in popularity, many offshoots of this recent trend has also established a similar foothold. Crowdlending is one of those offshoots. The premise for crowd lending is simple, individuals lend you money, expecting a return plus a portion of interest after a defined time for what they have invested either in instalments or otherwise. It seems a far less complicated and intensive version of borrowing money from a bank and dealing with being under the intensive microscope of a bank’s loan office. Crowdfunding, or community fundraising, on the other hand is basically a donation. Generous people interested in funding your business, invention or cause give you money and expect no return unless you provide a tiered reward system as many often do.
Choosing which of the two is ideal for you is not really a complicated process since at least for crowdlending one thing is relatively mandatory. You must be a business. Clearly you will have to at least plan to make some sort of profit as you will be returning invested capital with interest to possible lenders. Will you be a socially responsible company? Most crowdlending platforms do an extensive vetting process of their own, including credit checks on your business. While this will likely be nowhere near the level a bank would investigate before forking over a loan, it is important to be aware and prepared for this step. It is important to note that the occasional crowdlending platform is far stricter in their vetting process, requiring collateral or hard assets to secure borrowed funds.
Crowdfunding is a simpler and more general process that is not limited to any type of cause. Attracting donators may prove to be a
more involved process however since there is no guaranteed return of funds; it is the interest or hearts of donators that must be won over. The majority of donators won’t donate to a cause they don’t agree with, or a business with services that do not interest them. Those small cons are countered by the fact it is indeed community fundraising, and thus has access to an unlimited amount of potential donators that peruse the web and common sites like Facebook.
Crowdfunding further breaks down into more types, individually defined to cater to the types of causes represented. Some community fundraising platforms specialize in charities, nonprofits and other 501 (c) based organizations. One of the more famous sites for specialty crowdfunding only accepts creative projects, bypassing businesses, charity and other causes altogether.
There are bound to be many individuals interested in what you have to market. Marketing your particular cause is just as important as would be with crowdlending. Failure to advertise and market your idea in either case would cause it to fail, as you often cannot depend on just the mere listing of your cause among thousands others to garner the sort of attention needing to succeed at crowdsourcing. In both cases you will be depending on multiple people to fund you so ensure you have a wide appeal. Regardless of your cause there are crowdfunding opportunities out there for any need and it will be up to you to do extensive research to discover which is best for you.
Staff Writer; Nick Jones