Which of the following is not a method of alternative funding?Peer-to-peer lendingAngel investingBank loanOnline lending
Question
Which of the following is not a method of alternative funding?
- Peer-to-peer lending
- Angel investing
- Bank loan
- Online lending
Solution
To identify which of the options is not a method of alternative funding, let's first define what alternative funding methods generally encompass. Alternative funding refers to sources of financing that fall outside traditional banking systems. Typically, it includes:
- Peer-to-peer lending: A method where individuals lend money to one another without the involvement of traditional financial institutions.
- Angel investing: This involves affluent individuals providing capital for startups or small businesses, usually in exchange for convertible debt or ownership equity.
- Online lending: This is a broad category that includes various forms of lending via online platforms, typically outside traditional banking channels.
On the other hand:
- Bank loan: This is a traditional method of funding where individuals or businesses borrow money from a bank, often requiring collateral and a specific credit rating.
Verification
Given the definitions, the correct option that does not fit the description of alternative funding is Bank loan, as it is a traditional financing method rather than an alternative one.
Final Answer
Bank loan is not a method of alternative funding.
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