In the midst of flowering, crowdfunding is a true innovation in the world of finance.
Since may, 2015, that same summer term integrated in the Petit Larousse dictionary. "Crowdfunding."
"Pooling of financial contributions (donations, loans, investments) individual or associative, in order to finance projects business, cultural or environmental, usually over the internet."
Thanks to the development of new technologies of information and communication (NTIC), crowdfunding was able to adapt to the different financing needs of SMEs and startups who find more listening with their banks. Too small to be funded, too large to borrow from family and friends, crowdfunding to fill a void between the two in order to strengthen the fabric of SMEs in France.
New terms are then appeared in derivatives to the various practices of crowdfunding or crowdfunding:
- the crowdfunding
- the crowdlending (example finsquare, lendix, bolden)
- the crowdinvesting or Equity Crowdfunding.
But what are the real differences between the words crowdfunding, crowdlending and crowdinvesting?
Crowdfunding / donation
Crowdfunding grant is the most well-known form of crowdfunding to the general public. The don plays a crucial role in the new wave of alternative finance and the future of our economy especially in this time of crisis will end in France in the absence of reforms deep and unpopular.
It helps individuals give or support without real financial counterparties amount he wishes to causes and projects that are important to them. There is sometimes the ecological projects but often smaller associations.
2 types of donation:
- Gift with consideration
The gift can give the right to compensation according to the projects: gifts, goodies, products offered by the company.
This return is used to thank the contributor and is generally worth less than the value of the gift. C´EST the typical form of those selling a project for the concept. Some Internet users after will be identified and accepted the risks associated with investments unlisted may wish to contact the platform. c´EST also a good way to make free advertising for these new businesses.
- Don without consideration or donation-based:
This form of financing is the oldest. She appealed to the generosity of Internet users, for sponsorship or charitable projects. Purely symbolic donation where the contributor expects no compensation in return. Often to fund charities, individuals who have had diseases or serious injury. There may be tax benefits especially in the charity.
In France, the investment as a gift is legally the more flexible, as well for as for the donors crowdfunding platforms or project leaders, fortunately because we were very late compared to other countries.
Crowdlending or crowdfunding lending (lending = lending)
Money lending is booming thanks to the development of the Internet and the emergence of crowdfunding platforms. C´EST a local d´investissement form. Indeed you contribute to helping companies that you like about you.
The crowdlending, or lending crowdfunding, helps project carriers, who are struggling to obtain financing, borrowing money from individuals. An opportunity that benefits from the financial and economic crisis showing as an alternative to bank credit often considered cautious and slow.
Often the loan being purely made by investors who are disappointed with the poor performance offered by banks come to take profits in the crowdfunding. Indeed yields are interesting but it y of counterparties. For example the consideration of liquidity is very important in the crowdfunding.
Note qu´il should not confuse the participatory financing a loan and the loan which is public assistance in the form of loan.
- The order of May 30, 2014 removes the Bank monopoly on paid loans applied only from 1 October 2014
Indeed, before October 1, 2014, paying loans could not be offered by credit institutions authorized by the Bank of France.
- The Decree of September 16, 2014 specifies the conditions for the loans made by individuals in the context of participatory financing:
- loans with interest: within the limit of €1,000 by lender and project where the duration of the credit cannot be more than 7 years,
- interest-free loans: within the limit of €4,000 per lender and per project.
The promoter, meanwhile, will not be able to borrow more than €1,000,000 per project.
Crowdinvesting or Equity Crowdfunding
Equity Crowdfunding – crowdinvesting or in french 'crowdfunding actions' is one of the major trends of the sharing economy. C´EST a retracted outright in the company d´une capital. We share periods fast and the l´entreprise chagrin. Legally there are often tax benefits.
Real springboard for startups or young companies who have difficult access to bank credits and wish to increase their capital. These platforms allow to reach a wide audience and to advertise. In fact once the love spent money (a c´est say l´entourage has already given) promoters are in a phase or they are still too small for banks and needed an intermediary. Crowdfunding c´est therefore to fill a void.
The Equity Crowdfunding, entered into force October 1, 2014, allows SMEs to raise funds, up to 1 million euros, from private investors without going through the circuit of traditional financing.
There are other categories:
crowdfunding real estate
The crowdfunding is probably to banks as banks in lines are to traditional banks.