What exactly is Crowdlending?
Crowdlending is among the five types of crowdfunding investment (see figure below). It’s also called Peer-to-Peer financing (P2P financing) or market financing. ItвЂ™s a crowdfunding technique where investors co-finance tasks by lending cash (beneath the as a type of loans) to your borrowers (task owners) in substitution for passions ( e.g. purchasing a flat, funding a business). In European countries, in this way of spending can produce a return that is average investment of 12-14% each year.
This method permits investors to get into big opportunities, such as for example purchasing businesses or building, which they wouldnвЂ™t have the ability to do by themselves (supply: Wikipedia).
Crowdlending opportunities are done via crowdlending platforms. The first-ever global launched platform named Zopa had been created in British.
Figure: groups of crowdfunding (supply: HLSU)
Description per crowdfunding category:
- Reward-based crowdfunding: investors get a symbolic reward that is non-monetary such as for example an item through the business they supported.
- Crowdinvesting: investors be given a stake when you look at the financed projects future profits, equity in an organization or in an estate property that is real.
- Crowdlending: investors are promised payment with interest proportionate to your quantity they lent and also the linked risk.