Forget Peer Lending, Get Crowdfunding Instead!

Crowdfunding can be a great alternative to a peer loan for people that need money for a project or business idea.

Crowdfunding started as a way for social causes and entrepreneurs to raise money. In a matter of moments, you can launch a crowdfunding campaign page on one of the platforms. 

Sites like Kickstarter and Indiegogo give you a platform for showcasing your business product or social cause to the world, and a way to raise money through their massive audiences.

Advantages of Crowdfunding vs P2P Loans

The most obvious advantage of crowdfunding is that the money you raise does not have to be repaid. 

Equity crowdfunding, where you sell a portion of your company to investors, is growing but most people do well enough with rewards-based crowdfunding. 

Maybe the biggest benefit to crowdfunding, and likely the most overlooked, is the marketing and feedback you receive on your campaign. Kickstarter has an average of 13 million people stop by the site every month. 

Disadvantages of Crowdfunding versus Peer Lending

Crowdfunding isn’t all free money and huge marketing potential. There are drawbacks as well. A crowdfunding campaign can be a ton of work. 

The biggest drawback crowdfunding is that there’s no guarantee you’ll get anything. In fact, about 60% of campaigns don’t reach their funding goal. On sites like Kickstarter, you won’t get a dime unless you meet your target.

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