THEORETICAL ASPECTS OF ALTERNATIVE SOURCES OF FINANCING BUSINESS ENTITIES IN THE AGE OF DIGITALIZATION: CROWD TECHNOLOGIES

Abstract

Recently, society is experiencing an era of upheaval of both political and economic nature. Economic crises and pandemics have hit entrepreneurship hard, from individual entrepreneurs to large enterprises. Recently at this time that choice of optimal sources of funding for businesses becomes important. Reduced lending by financial institutions, high interest rates on loans is forcing companies to seek alternative sources of financing, especially when the demand for investment resources is growing. In the era of digitalization, financial technologies are developing rapidly. The explosive growth of the Internet and social networks has greatly expanded the opportunities to increase opportunities to attract and, conversely, invest in business. Crowd technologies, which have become an alternative to traditional financial services, are alternative sources of financing for businesses. Crowd technologies are becoming more popular around the world every year; new segments are emerging and moving from alternative sources of funding to the main one. However, in Ukraine, where obtaining a classic loan from a bank is very difficult and not cheap and fast bank lending involves high interest rates. The article identifies the essence, advantages and disadvantages, the specifics of crowdfunding as an alternative source of financing for businesses, provides statistics on crowdfunding in the financial market in recent years in the world and in Ukraine. The crowdfunding market is undergoing significant changes every year that cannot be ignored. It has been found that in order to identify and effectively manage the sources of financing of economic entities, it is important to understand the difference between crowdfunding, crowd landing and Equity Crowdfunding. In the era of digitalization with the development of crowdfunding, businesses in Ukraine have the opportunity to get cheap investment resources. Based on the above, it can be noted that crowdfunding has appeared in Ukraine not so long ago, but is developing quite rapidly. In modern conditions, distrust of financial institutions of both investors and economic entities, crowdfunding can affect the reproduction or creation of business, businesses may have different alternatives to raising capital, which can be a powerful accumulator of free resources.