The increasing popularity of crowdfunding to raise capital for small businesses could actually complement credit union business lending, not compete with it, said one industry expert.
Crowdfunding is a term used to describe a method of raising money, usually through the Internet, to generate financial support for such things as films and music recordings, typically through small individual contributions from a large number of people.
"Crowdfunding is an exciting new development in capital raising, but it is not a competitor to credit union business lending," said Bill Beardsley, president of Michigan Business Connection LC, a commercial lending CUSO in Ann Arbor, Mich. "Instead, capital raised from these investors could complement traditional lending to help balance the risk."
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