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GCSE Business · key term
Raising finance through contributions from many people, usually through an online platform.
Used by Edexcel and OCR
Specification 1.3.4 · Paper 1
Revise: Sources of Business FinanceCrowdfunding raises finance from many people, usually through an online platform. Rather than obtaining the entire amount from one lender or investor, the business attracts numerous smaller contributions.
Paper 2
Raising finance through contributions from a large number of people, usually through an online platform.
Revise: Methods of Raising FinanceCrowdfunding raises money from many people, usually through an online platform. A business presents its idea and tries to persuade people to contribute. It may offer rewards such as a product sample or early access to a new product.
Do not assume all crowdfunding is interest-free: the obligations depend on whether contributors provide loans, buy shares or receive rewards.
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