Equity-based lending is more akin to venture capital. Again, platforms enabling start-up firms to sell equity stakes to raise capital are expected to have raised almost $1.1 billion by the end of this year.
North America boasts the largest number of platforms. However, it has achieved 59% compound annual growth in the number of platforms during the last six years.
Of the 450 platforms that the survey uncovered, 191 are in the US. The UK has the next biggest industry with 44 platforms. The Netherlands, France, Germany, Spain and Canada follow respectively.
Crowdfunding platforms are putting pressure on the traditional banking industry to modernize. As well as being an alternative to loans, platforms are using micropayments systems, such as PayPal and Amazon Payments, sidestepping bank transactions.
According to the survey, more than 60% of platforms require entrepreneurs to deposit money using PayPal as a means of payment.