Crowdlending Debt – The Unsung hero of Crowdfunding? - CrowdClan

Crowdlending Debt – The Unsung hero of Crowdfunding?

So, why the bullish take on Debt crowdlending? Here are 4 reasons:

1. Global patterns play out


Masssolutions 2013 report indicated that crowdlending was the biggest sector ahead
of donations, rewards and equity. This is driven by Europe where
crowdlending is most established. If the pattern unfolds similarly then
lending (and equity) will skyrocket as well. The markets have many
similarities so we think the pattern will hold.


2. Better Investor returns


Investor returns on the equity side could be massive as anyone who is
familiar with the Oculus Rift story is aware. That is the exception not
the rule though as equity campaigns require a longer exit window (as
shown by this Small Business Crowdfunding Infographic courtesy of
InvestNextDoor), some will fail and these are investments that are
dealing in private capital that is, short of emerging secondary markets,
not liquid.


Contrast this with debt payouts of 10-15% paid monthly that generate
cash flow and a more secure return. This should attract investors
looking to diversify and earn market returns. This has been the driver
of the success of platforms like Lending Club, Prosper, Kabbage and On
Deck that all have impressive growth rates including the impending IPO
of Lending Club. Campaign sizes tend to be $100k or less.