Will Crowdfunding Replace the Local Bank Department?

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Crowdfunding is a voluntary opportunity for people to collaborate and financially support a business. The business leader creates a campaign describing the passion and purpose for the new business. Since the economy is still sluggish, there has been a plethora of crowdfunding businesses sprouting up over the internet.

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What does this means for banks? Will banks be able to compete with crowdfunding, if people choose to collectively support businesses and allow businesses to not repay funds? We will just have to wait and see. Crowdfunding is still in its infancy.

On the other hand, crowdfunding creates great return on investment for the new business leader who needs funds. If a business leader can convince the crowdfunding agency and crowd funders that the business plan is worth the investment, then that is a plus for entrepreneurs. Yet, new entrepreneurs are not the only ones who need help in this shaky economy.

Some businesses have fallen on hard times and need a financial shot against the epidemic of bankruptcy. It would take a lot of convincing to get a refinancing loan if a company is close to bankruptcy. However, it would not be a cinch, but an easier task of explaining to a crowdfunding agency the need for additional money.
The concepts of refinancing and bankruptcy would not be in the conversation when talking to the crowdfunding agency about getting funding. Crowdfunding supports older businesses when the leaders are caught between a decision of closing and staying open. The chances are greater with a crowdfunding agency, than with the local bank or any e-bank. So where does that leave the status and future of banks who support
businesses financially? Let us not take the business loan department sign down just yet. We will observe the crowdfunding scene in 2015. Do you have a creative business idea that will fill a gap in society? Maybe you need funds for your current business.

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Will Crowdfunding Replace the Local Bank Department?, Seekyt
General Contributor
Janice is a writer from Chicago, IL. She created the "simple living as told by me" newsletter with more than 12,000 subscribers about Living Better and is a founder of Seekyt.