Today you will come across the term “crowdfunding”. This is usually associated with, for example, artists or charities. The purpose of these artists or a specific charity is to raise money to finance a specific project.
Because crowdfunding is often only associated with this type of large-scale projects, it is far from my bed show for many people. And that is a shame, because there are sounds that crowdfunding is borrowing the new money.
Certainly lately there has been a trend in which people who think they have a good idea are trying to raise a sum of money in this way. This can cover all possible subjects, starting a restaurant or hotel, a nice idea to start selling an innovative product online to setting up an organization that can give consumers a discount.
You can’t think of it that way, but if you have a really good, unique idea that requires more money than you have, crowdfunding is the ideal way to get the required amount together.
How does it work then
You start by registering on a so-called “crowdfunding platform”. After your registration you can bring your project to the attention of so-called investors. This can be both individuals and companies. As soon as your project, for example an amount of € 12,500 for the purchase of a new kitchen, has been approved, it becomes visible to potential investors and they can register for it. Of course they want to earn something from you and you pay a certain interest rate on the borrowed money.
If the amount has been raised by the various investors, also known as crowdfunding, the loan is complete. Borrow the new money from crowdfunding? It certainly looks like it, because the beginning is there anyway.
Why choose crowdfunding to borrow the new money
There are people who consciously opt for crowdfunding because they think it is a more personal form of money. An ideological thought that you help each other. Another reason for choosing crowdfunding is if you cannot get the amount you want to borrow through the bank or other lenders.
Perhaps because you do not meet the income / expense requirement of a bank because you just do not earn enough. Another reason may be that you still have current debts and, well, it often stops. Crowdfunding, borrowing the new money can therefore be the solution for you to get the money you need together. This way “your project” can continue!
Crowdfunding for your neighborhood
There is also a website active where you can request crowdfunding if you want to start a project in your area, for example a party, a concert, do something for animals, increase safety for cyclists, a pop concert, redecorate a village house and go so on.
When you look at the initiatives you see that for appealing projects amounts of around 5,000 euros are collected. Do you also have something in your area that deserves the attention of more people and costs money, then check one out on the crowdfunding website in your area.