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The funding crowd

“Every crowd has a silver lining,” said P.T. Barnum, America’s “greatest showman”. For businesses, Barnum’s play on words is especially true: crowds are becoming something of a motherlode of funding for small and medium-sized enterprises (SMEs). With bank lending declining, smaller businesses are looking for alternative ways of financing. Thanks to the world wide web, they can now solicit funds not just from banks and professional investors, but from virtually anyone with internet access. This approach can take different forms. Besides crowdfunding (where many individual contributions–usually sourced online–make up the funding), examples include online invoice financing (where SMEs, for instance, can borrow online against unpaid invoices) and peer-to-peer lending activities (online services that match lenders with SME borrowers). Together, these funding opportunities constitute the online alternative finance market. Read the full article here.