News

07.30.2012

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STEPHANE

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All Forms of Equity Financing

In france, there are various fields that equity funding adapts to. A couple of these include the fields of business and culture. Social networking has been a positive and successful influence on its rapid development.

The principle is simple. The internet is a popular source that businesses use to find financial aid from web users that will help them complete their projects.

There are many types of financing that involves equity finance and based on the same principle, the modalities differ.

The Different Types of Equity Finance

Interest free loans

Microfinance: Lending through microfinance enables lenders to lend very small amounts of money to projects without interest It is this method that MicroWorld uses

When a micro-entrepreneur has repaid their loan, the lender receives the original amount they lent and can then choose to support another project.

Loans with interest

Lenders make an investment on a micro-entrepreneur's project through the internet and in return, they receive the interest on the amount they have invested. The amount of the loan is generally higher than lending through microfinance and micro-entrepreneurs are located in many developing countries.

Financial Contributions

These projects are funded through a grant using the internet. Grants are disbursed by one party. Often, the party is from a corporation, government department, foundation or trust. Projects come in different forms and affect many industries.
In exchange, the lender is rewarded with goodies depending on the type of project he/she invested in.

Capital Financing

The idea of this type of equity financing is to enable investors to develop capital risk type investments. If you apply crowdfunding to this type of financing, the unit amounts are less important to investors. This type of financing is developing little by little.

The goal of equity financing is to encourage new projects to emerge thanks to investors contributing reasonable amounts on the website(s) they have contributed on. After the investor contributes a certain amount, they can track the progress of the project to see that it reaches its requested amount.

To understand more about how equity financing really works, go to The CROWDFUND Act article to get detailed information.