Are you someone who has excess cash and are looking for an investment opportunity or are you a business in need of some working capital? If so crowd-funding may be the opportunity you were looking for. 

Crowd-funding is a new business investment initiative launched earlier this year by linkedfinance.com.  The basic premise of the idea is that businesses will apply for funding for amounts from €5,000 to €50,000 and as an investor you will have the choice of which business you would like to invest in and how much you wish to invest in each.  You can lend as little as €50 and earn returns of between 5% - 15% p.a. The term of each loan is three years with a fixed interest rate and repayments will be made monthly.

Lending:  This is an opportunity for an investor to get a better return than leaving funds in a deposit account. The investor registers online and when registered can browse the full detail of all loan applications and choose which type of businesses to lend to and can lend to businesses in their area which will support the local economy.  Investors choose how much they wish to invest and the interest rate they will lend at and then make a bid on an online auction.  If the bid is successful the first repayment will normally arrive within a month of the loan being given and this is then added to the cash fund and can be lent to other borrowers. As with all business lending there is a risk that some businesses may not be in a position to repay their loan and investors are encouraged to spread their money across 20 or more businesses as this significantly reduces the risk.  The investor will receive an annual statement of the interest earned on their lending activities.

Borrowing:  Any established and creditworthy business can apply for a loan on linkedfinance.com. All businesses are subject to stringent background checks and are only allowed to borrow if they have successfully completed a comprehensive screening and credit vetting process. Businesses need to complete a detailed online application which will include background information on the business, details on the purpose of the loan and business financials. Once approved, the loan application is posted online for all to see and lenders can start making bids online.

Should the above be of interest to you take a look at linkedfinance.com to get more information and who knows maybe you could run your own mini version of Dragon’s Den and have a bit of fun along the way.

Julie Murray, Audit Manager