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RE: Explaining Loans
It's called the stock market.
- They can issue bonds or borrow liquid money which is technically the same but the terms differ.
- Or they can sell their % ownership of the business, in form of a stake (like STEEM POWER), like in a stock market.
The pros and cons are different for each, but usually you issue a stake if you think the business is more risky, and issue a bond if it's less risky.
For example with STEEM POWER, people could lose a lot of money because it went down so far, but if Steemit outgrows Facebook, then the initial investor will become literal billionaires.
So SP is risky but it can also be very very rewarding.
Yes and I see crowdfunding going exponential as more people loose faith and or trust in banks as well as wall street.
Yes crowdfunding is better for smaller projects, where the risk is absorbed by the initial investors.
Banks are usually meant for larger businesses that are already established. The business loans have strict terms that small startups find is hard to comply with.