Research Project Essay Example | Topics and Well Written Essays - 500 words - 2

Research Project - Essay Example P2P is usually gathered from friends, relatives and associates or partners in business; can be transacted thru internet, and due to absence of collateral, a lot of trust is required Because of the high risk involved, this kind of financing charges high interest that is a drawback to borrowers. (Investopedia). Crowd-sourcing is becoming a popular source of funding for non profitable organizations like artists, musicians, charitable organizations and even businesses that has become possible through social media. People are persuaded to give a small donation like $5, $10, or more. Gathered together, this amount grows to a fantastic amount depending on the public’s response. Some examples are, The â€Å"Ice-bucket Challenge† that even Pres. Obama was challenged to give response; another is asking for donations in return for a reward. This scheme has become so trendy that the government has stepped in to regulate.(Entrepreneur) The basics of crowd funding) Microfinance. A banking service provided to poor entrepreneurs who have no chance to qualify for standard banking services. Microfinance gives opportunity to small business owners to borrow a small capital without collateral. Microfinance loan is usually not more than several hundred dollars, payable within six months to one year. The micro finance goal is to provide money to the low income groups to invest to a small business to get them out of poverty.(Brooks, Chad. 2013). According to Chad (2013), citing World Bank records, there are 7,000 micro financing companies that provide this service worldwide. Venture capital (VC). VC is an equity financing that answers the financing needs of an entrepreneur who is not large enough to seek capital from public market and banks. Cash investments are made in exchange for shares in the company