#OHglossary Identifying and clarifying keywords in OpenHeritage
alternative credit and funding opportunities
Credit and funding opportunities can be divided in equity and debt capital. “Genuine
own money”, public funding, gifts and donations, cooperative and other company
shares and private loans are summarised as equity. Examples for debt capital are
loans from public or special financing institutions, instruments of the german GLS
Bank like “loan and gift community loans” or guaranteed loans, loans offered by the
public sector and land charge loans offered by local banks (Stiftung trias 2017, 9)
“Classical” funding opportunities are deposits and loans, which are backed up by
security values (Schneck 2006, 11), like land property or building leases (Stiftung
trias 2019, 16). In opposition, any other funding opportunities can be defined as
“alternative”. A classification about what is “alternative” is defined, in accordance to
their standards, by the risk management of each bank or money lender, in order to
determine risks of lending capital to costumers and their and stability. Most banks see
any loan which is not secured by land or buildings as “alternative financing”.
In addition, people, who do not have access to the classic sources of funding, have
developed new ways for getting access to capital and other sources needed for a
project to become reality. “Alternative” means in a lot of cases sharing the risk within
a group of people by dividing it into small guarantees. Examples are company shares
or “loan and gift community loans” or (a group lends money together, everyone
guarantees a small amount (a group lends money together, everyone guarantees a
small amount) or other different forms of crowdinvesting.
A number of banks have developed guidelines to evalute the risks of certain funding
opportunities and are able to deal with these funding opportunities.
Schneck, Ottmar. 2006. Handbuch Alternative Finanzierungsformen. Weinheim:
Stiftung trias. 2017. Die Finanzierung zivilgesellschaftlicher Projekte. Hattingen:
Stiftung trias. 2019. Bürgerfonds für Fachwerkstädte: Gemeinsames
Forschungsprojekt. Hattingen: Stiftung trias.
Cooperative City Books. 2017. Funding the Cooperative City. Edited by Daniela Patti
and Levente Polyák. Vienna: Eutropian Research & Action.
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