The continuing pressure for banks to improve their lending to small businesses could help make 2014 a take-off year for crowdfunding
The Financial Conduct Authority has already paved the way for the Chancellor to embrace alternative lending more openly with a set of new rules for the sector which will come into force in April. HM Revenue & Customs is already consulting informally on bringing crowdfunding within the Isa regime, and the move could be unveiled by the chancellor in his March budget.
“Consumers who want to invest in small or start-up businesses via crowdfunding platforms will in future receive clearer information about the business in which they are investing,” the FCA has said. The changes relate to peer-to-peer lending and equity investment based crowdfunding.
Businesses can choose to offer crowdfunding investors equity in the business or some kind of rewards related to the company’s products.
Glasgow Chamber of Commerce has reported that 54% of its members would consider crowdfunding, while those who had tried it typically raised less than £50,000.
Scottish pioneer BrewDog was so successful in its first £2 million crowdfunding exercise that it launched another this year to raise £4m.