Fractional financing
Fractional financing is like when you and a friend decide to buy a toy together. If the toy costs $10 and you and your friend each have $5, you can buy the toy together. This is kind of like how people buy bigger things like houses or businesses. A lot of times, they don't have all the money they need to buy it by themselves, so they get other people to give them money too. These people who give money are called investors.
Fractional financing is a way of getting investors to put money into something. The company or person who needs the money will take the thing they want to buy, like a building or a car, and divide it into "shares" or "pieces" called "fractions." Each investor can then buy a fraction or a share of the thing they want to buy.
For example, let's say a company wants to buy a building, but they only have $50,000 and the building costs $500,000. They decide to divide the building into 100 "fractions" that cost $5,000 each. They can then offer these fractions to investors who want to put in money towards buying the building. Each investor can buy as many fractions as they want, and together, all the investors will own the whole building.
When the building is bought, the investors will share in the profit or loss of the investment. This means if the building is sold for more than it was bought for, the investors will get some of the profit. But if the building is sold for less than it was bought for, the investors will lose money.
Overall, fractional financing is a way of getting lots of people to invest in something so that the cost is spread out and more affordable for everyone.
Fractional financing is a way of getting investors to put money into something. The company or person who needs the money will take the thing they want to buy, like a building or a car, and divide it into "shares" or "pieces" called "fractions." Each investor can then buy a fraction or a share of the thing they want to buy.
For example, let's say a company wants to buy a building, but they only have $50,000 and the building costs $500,000. They decide to divide the building into 100 "fractions" that cost $5,000 each. They can then offer these fractions to investors who want to put in money towards buying the building. Each investor can buy as many fractions as they want, and together, all the investors will own the whole building.
When the building is bought, the investors will share in the profit or loss of the investment. This means if the building is sold for more than it was bought for, the investors will get some of the profit. But if the building is sold for less than it was bought for, the investors will lose money.
Overall, fractional financing is a way of getting lots of people to invest in something so that the cost is spread out and more affordable for everyone.