Crowdfunding is becoming popular among businesses that want to acquire additional capital but do not want to opt for fast business finance. It seems to be gaining popularity over traditional fast business finance but like most popular business solutions it’s not everyone. How do you know if crowdfunding is your best option?
Crowdfunding works two ways; the first one is rewards-based. What it does is it allows people outside of the company to put in money for a project, often a revolutionary product that is yet to go underway. The money they have invested gives them the right to receive the first release of the product. These projects usually involve products that are new to the market, an idea that are unheard of but piques the interest of a certain market. The second one is called equity crowdfunding, the expectations for this kind is that the investor will own a certain percentage of the company and the share is commensurate to the amount they paid. This is similar to being a share holder in a huge corporation but the difference lies in the amount being invested. Equity crowdfunding requires a smaller amount of investment.
Fast business finance or Crowdfunding
Having discussed that, you can now gauge whether to go with crowdfunding or to stick with fast business finance. If you are the person behind a great idea but lacking in funds then you may opt for the rewards-based crowdfunding provided you have a lot of time on your hands and can afford to wait it out. However, you have to realise that there is a downside to this because your initial production will mostly go out to the first line up of people who invested in your company. This means no income and no control over the cash flow.
Why should you go with a fast business finance? Since this is a loan and paid over a certain period, you have full control over the amount that will be paid out every month. Rest assured that the people who have expressed interest in your product will still be willing to purchase your product even if they did not invest in it. Fast business finance will also enable you to undertake production at a faster pace, you will be able to launch your product while everybody is still extremely hyped up over it. This steps up your sales and ensures that your production will be continuous. Despite the popularity of crowdfunding you will have better financial options with fast business finance.