When we begin to pull away from recession entrepreneurs start and expand the business at an accelerated pace. Unfortunately, they found that the traditional sources to raise capital are increasingly hard to come by.
Banks have tightened their lending policies. At the same time a lot of money looking people suffer a bad credit rating due to the difficulties experienced during the recession.
The convergence of these factors is the perfect storm that creates opportunities for alternative providers of loans and financing. You can get more information about Kickstarter and Indiegogo recommended experts via internet sources.
Crowdfunding is ready to lead
List of alternative methods to raise capital including Crowdfunding, Peer to Peer Loans, Micro-loans, Income-Based Financing, and more. While each can be a promising source of capital for small business owners, Crowdfunding seems to have generated the most buzz.
A new Google search on Crowdfunding occurs with more than 9 million results. Crowdfunding is not just generating some real buzz but also spurning a lot of questions and confusion. Our goal here is to answer some key questions and help clear confusion and misunderstanding surrounding Crowdfunding.
Image Source: Google
How it works
The Crowdfund Act allows companies to raise up to $ 1 million per year from individual investors. Investors and those seeking funding will be brought together by a middleman, either a broker or an internet site. Brokers and websites must register with the SEC.
It aims to protect investors by requiring brokers to register with the SEC and by limiting how much individuals can invest. For example, investors who have an annual income or net worth under $ 100,000 can invest no more than $ 2,000 or 5% of their annual income or net worth.