Debt-based crowdfunding, often referred to as peer-to-peer lending (P2P), is a great way to raise money for small businesses that may find it more difficult to obtain loans from traditional lending institutions. Also, small business loans often take much longer to get funded than the average debt-based crowdfunding loan, which makes debt-based crowdfunding a suitable funding option for businesses that need funding relatively quickly. According to P2PMarketData, this crowdfunding model has proven to raise the largest amount of capital on various platforms.Businesses utilizing debt-based crowdfunding raise capital by taking micro-loans from hundreds of lenders who are also called investors.

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