CrowdLending (Business) - United States

The total transaction value in the Crowdlending (Business) market market in the United States is expected to reach US$7.83bn by 2024.
When compared globally, China leads with a transaction value of US$16bn in 2024.
In the United States, the CrowdLending market for Capital Raising is experiencing significant growth due to increased investor demand for alternative financing options.

Definition:

Crowdlending platforms, otherwise know as lending-based Crowdfunding enable small and medium-sized enterprises to get loans from single or multiple, private and institutional investors via an online brokering platform. On credit platforms such as Funding Circle, OnDeck, Kabbage and Lending Club, businesses can obtain small loans up to a set maximum value. As a rule, financing requests are analyzed by the provider via an internal scoring system and are checked against additional minimum requirements such as turnover. Subsequently, these financing requests can be invested in by private and institutional investors at an appropriate interest rate determined by the credit rating of the company. This makes it possible for SMEs to borrow quickly and easily, as the basic requirements for obtaining finance are more flexible compared to traditional bank loans.

Alternative financing for SMEs and freelancers (bank-independent loans)
Small business loans issued by single or multiple private and institutional investors (non-banks)
Online loan request, scoring and approval

Traditional bank loans
Consumer loans and credit card transactions
Business-to-Business credit scoring and rating services
Online marketplaces for consumer loans (see Marketplace Lending)

The CrowdLending (Business) market in United States has seen significant growth in recent years, driven by a number of factors.

Customer preferences: One of the key reasons for the growth of the CrowdLending (Business) market in United States is the changing preferences of customers. Traditional lending institutions often have strict criteria and lengthy approval processes, which can be a barrier for small and medium-sized businesses. CrowdLending platforms, on the other hand, provide a more streamlined and accessible lending process, allowing businesses to access funding quickly and easily. This appeals to many entrepreneurs and business owners who are looking for alternative financing options.

Trends in the market: The CrowdLending (Business) market in United States has also been shaped by several trends. Firstly, there has been a rise in the number of online platforms that facilitate CrowdLending. These platforms provide a marketplace where businesses can connect with individual lenders, creating a more efficient and transparent lending process. This trend has made CrowdLending more accessible to businesses of all sizes. Another trend in the CrowdLending (Business) market in United States is the increasing demand for peer-to-peer lending. Peer-to-peer lending allows individuals to lend money directly to businesses, cutting out the middleman and reducing costs. This trend has gained popularity due to the potential for higher returns for lenders and lower interest rates for borrowers.

Local special circumstances: The United States has a vibrant and dynamic business environment, which has contributed to the growth of the CrowdLending (Business) market. The country is home to a large number of small and medium-sized enterprises (SMEs), which often struggle to access traditional financing options. CrowdLending platforms have filled this gap by providing a platform for SMEs to access funding from individual lenders.

Underlying macroeconomic factors: The growth of the CrowdLending (Business) market in United States is also influenced by underlying macroeconomic factors. The country has a strong and stable economy, which has created a favorable environment for businesses to thrive. This has led to increased demand for financing options, and CrowdLending has emerged as a viable alternative to traditional bank loans. Additionally, low interest rates in the United States have made borrowing more affordable, encouraging businesses to explore alternative financing options such as CrowdLending. The Federal Reserve's monetary policy has played a role in keeping interest rates low, which has created a conducive environment for the growth of the CrowdLending (Business) market. In conclusion, the CrowdLending (Business) market in United States has experienced significant growth due to changing customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. The accessibility and efficiency of CrowdLending platforms, along with the demand for alternative financing options, have contributed to the development of this market. With a vibrant business environment and favorable macroeconomic conditions, the CrowdLending (Business) market in United States is expected to continue growing in the coming years.

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Crowdfunding is the collective effort of a large number of individuals who network and pool small amounts of capital to finance a new or existing business venture. Each campaign is set for a goal amount of money and a fixed timeframe, each day is counted down and the money raised will be tallied up for visitors to follow its success. The size of the global crowdfunding market is growing and the largest markets are North America and Asia.