Is crowdlending a big industry in Singapore?
Raising capital for a business has been one of the biggest challenges and this is more prominent in developed economies like Singapore. While it is never easy to find Venture Capitalists (VCs) or investors to fund your business, turning to crowdlending or crowdfunding might just be your solution.
How does crowdfunding work in Singapore?
Like every part of the world, crowdfunding allows you to put your idea out in the open, pitch it online and have those who are interested invest. This usually goes into your seed capital to get you started.
What are the types of crowdfunding available?
Generally, you can choose between:
- Donation-based crowdfunding – Where funds are collected for a charity
- Reward-based crowdfunding – Investors put their money in for a reward like a product or service offered by the company.
- Lending-based crowdfunding – This works like a loan where the company will have to pay back in the future (with agreed interests)
- Equity-based crowdfunding – Investors get a share in the profits.
What are the most popular crowdfunding platforms?
Below are some of the top crowdfunding platforms in Singapore.
This is probably the biggest crowdfunding platform in Singapore. It has launched countless projects and businesses ranging from technology to games and even in film production. It runs on a concept where your campaign must achieve its goal before the investors are charged. They also impose a 5% fee on the total amount raised.
Indiegogo is a popular platform for crowdfunding in Singapore which is known for its flexibility where you can choose to keep what you have raised or to go for the all-or-nothing option both of which come with their own sets of terms and conditions. This is a great platform for those in the creative industries and in the technology sector.
MoolahSense is a quick and efficient platform to fund your business as you could possibly get approved within 3 days. It has since helped to fund more than 150 SMEs and raised over SGD$21 million. The platform is supported by Capital Market Services and it works on a short business loan concept, imposing interest rates between 9 and 24%.
A more contemporary crowdfunding platform where Patreon is ideal for those in the creative industry. If you are an aspiring blogger, YouTuber, live streamer or musician, this platform could well be the place to start raising funds. Investors can choose to help content creators through monthly payments for certain personalities or you can also choose to pay for every content created. This will spur them to produce better and more content.
With the FundedHere platform, you can decide whether to choose your funding option to be equity or loan. To be eligible, you need to be a startup that is incorporated in Singapore and has a minimum of 3 months in operation and a paid-up capital of at least SGD$50,000, among others.
Funding Societies is typically a P2P (peer-to-peer) lending platform. It is one of the largest P2P lending platforms in the region that provides services such as invoice financing and business term loans where it ranges from SGD$5,000 up to SGD$1.5 million.