Alternative Finance: A New Reg-Generation For A New Disruptive Phenomenon

For a new marketplace

Bank lending is the most common source of external finance for several actors that are reliant on traditional debt to fulfill their cash flow and investment needs.

While it is commonly used by mid and large cap companies, SMEs, in particular newer, innovative and fast growing companies, with their higher risk-return profile, pose some challenges to traditional bank finance.

In an effort to circumvent the challenges of conventional financing, alternative financing schemes have arised to mobilize private investments.

Hence, crowdfunding has become an alternative source of funding across many sectors, and it is increasingly used to support a wide range of for-profit activities and businesses.

If peer-to-peer lending is attractive for small businesses that lack collateral or a credit history to access traditional bank lending, crowdfunding platforms are evolving into more sophisticated intermediaries.

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