This file contains a paper on forms of funding written in English. The document is written in the Propaedeuse Year of Financial Management (combination of accountancy, finance & control and tax law and economy). The different forms of financing are part of the full professional product of writing a...
, The company that is founded is a new paintball and lasergame company with a new experience
named Darkshot. To realize this idea a lot of money is needed. Getting a loan from the bank is hard
and actually impossible for small businesses at the moment. So out of necessity, is looked at
alternative financing resources. There are a lot of other ways to obtain loans. Four of those are
explained below.
Peer to peer lending
Peer to peer means literally ‘’equal to equal’’. So, people who want to lend money are equal to those
who need to borrow money. There are websites that give the opportunity to connect those people.
This is different compared to crowdfunding, where the money seeker is in almost all cases an
entrepreneur and the investor does not have to be. Peer to peer lending is mostly used for private
cases, such as financing a new bathroom or renovating a home. The interest varies.
The advantages of peer to peer lending:
- Rather low interest rates
It is a convenient way to borrow at a lower interest rate than at the bank
- Accessibility
You can find a clear overview via the internet about the supply of amounts and interests
rates so that a good choice can be made.
The disadvantages of peer to peer lending:
- Control
It is not always clear how the credit worthiness check is done. As a lender you always have
the risk that the borrower can not repay.
- Young formula
Peer to peer lending is a lending formula that is still in its initial phase. The networks of peer
to peer loans have a hard time breaking through in the Netherlands and Belgium.
The costs of peer to peer lending
The amount of costs is different at each loan. In general the different websites range from 0,5% to
1%. The interest rate is also dependent on, for example, at your risk level. At a high-risk level your
interest will be higher than at a low risk level. Think about an interest that varies from 0,5% to 3,5%.
Crowdfunding
there are a lot of different crowdfunding variants, but they all have the same basic principle. Many
small lenders together form the target capital. This often happens online.
Crowdfunding can be divided in three different models:
Donation model
The investor donates a fixed amount and does not get something in return. This is out of charity.
Natura model
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller DeBesteSamenvattingen. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.26. You're not tied to anything after your purchase.
