Whether you are a corporate or a non-profit organisation, fundraising is something that you have to go through some time or the other. You need to raise money for either a new venture, a large project, or something else. But you do need to undergo fundraising. Now the two most feasible options for fundraising are – Loans and Crowdfunding. Among these two options, crowdfunding is any day the better choice. There are a lot of crowdfunding advantages which make it better.
Loans aren’t being as accessible as they were in the past. Especially if you are applying for a business loan, you need to go through a lot of procedures. And even after all those efforts, you cannot be sure that you will receive the required loan amount. That is why crowdfunding is always the better option. Here are some of the crowdfunding advantages which make it a better choice.
#There are only two prerequisites.
Unlike a bank loan where you need to go through 100 different things, there are only two prerequisites in crowdfunding – A strong idea and strategic marketing. This is the most important of all the crowdfunding advantages over bank loans. A strong idea is going to be the basis around which your entire campaign runs. Thus, you cannot compromise with it. Then you need some planned marketing which will help you spread this idea.
#You have a larger pool to appeal to.
Another great one on the list of crowdfunding advantages is that you have a larger pool to appeal to. You don’t need to worry if one bank or one lender is not convinced with your ideas. You have a much larger group to convince.
#Additional marketing before the launch.
To host a successful crowdfunding campaign, you need to indulge into efficient marketing. This crowdfunding prerequisite also becomes one of the crowdfunding advantages. This is because when you market your crowdfunding campaign, you are in fact promoting the idea of your product or services. Thus, your product will be marketed before its launch and it will directly affect your sales once the product is released. Plus, your backers will also be on the list of your first customers.
#Your backers become your brand ambassadors.
Word of mouth is one of the most powerful marketing tools. And that can come really handy if you have backers and investors with you. Your investors not only just fund your project but also become your brand ambassadors. This becomes one of the most amazing crowdfunding advantages. Since they have invested in your project, they trust you and want your business to grow. Thus, they will try their best to make it popular.
#Lesser repayments required from your side.
From an economical point of view, this is the most crucial of the crowdfunding advantages over bank loans. In the case of loans, the repayment is to be done in the form of principal amount + interest. Now when you compare this amount to the costs of equity, reward or debt-based crowdfunding, you can clearly realize the difference. The latter is always much more economical and thus viable.