Why should I use Crowdfunding instead of a bank loan?

 

First, let me clarify what crowdfunding is. It’s simply an innovative way to enable a crowd of people to each contribute a small amount of money that, when combined, can fund a vital capital project, or refinance existing debt. This can be in the form of loans or donations. Also known as peer-to-peer lending, the basic premise is that by cutting out the banks with their big overheads borrowers pay a lower rate of interest on their loan and lenders earn a higher rate of return than they might otherwise make on their savings. Crowdfunding, or peer-to-peer lending is suitable for all sorts of funding requirements including development projects, asset purchase or even working capital.

Crowdfunding platforms, like InvestMySchool.com, are often small, nimble and flexible with much lower overheads than traditional high street or commercial banks. This means arrangement fees can be significantly lower and response times significantly higher. Not just for businesses that can’t get finance elsewhere, but a truly innovative alternative finance option.

Crowdfunding platforms must be authorised and regulated by the Financial Conduct Authority (FCA) to be able to offer this service. The process of achieving authorisation is stringent and the ongoing monitoring ensures that risks for borrowers and lenders are kept to a minimum.

In what we believe is a world first, and what makes InvestMySchool.com different from other crowdfunding platforms, borrowers can also set the interest rate that they would like to offer their lenders. Lenders are likely to be the parents, alumni or wider school community. This approach could reduce interest payments compared with banks minimum rates. With less bureaucracy and red-tape than a bank, the decision on whether a funding request is suitable for listing on the platform can be made within 24hrs. If the terms of the funding request are attractive to all parties involved, then funds could be pledged and paid to the borrowing school incredibly quickly.

The benefits for independent schools are clear; savings in terms of fees, interest rates, time and turnaround. It’s also a great way to engage with the school community, to bring them along with you on a project and to potentially deliver it to them sooner.

To summarise, Crowdfunding through InvestMySchool is fast, flexible and cost-effective. All the hard work of raising funds is done for you leaving time to deliver a great education.