Today, it is possible to find or carry out financing via crowdlending platforms. Have you set aside a more or less important sum? Do not hesitate to give credits to SMEs and VSEs to make your money grow. But what is crowdlending?
Crowdlending: what is it exactly?
Crowdlending” is also known as an equity loan. It is an offer that has become very common in France to finance entrepreneurs, VSEs and SMEs. The principle is simple: private individuals lend money to company managers to set up a project or to provide cash flow. In this way, they become creditors. The advantage? The annual return is more interesting than life insurance and retirement savings, as it can be up to 10% net. In this way, crowdlending is one of the best investments to boost your savings.
Lenders and beneficiaries meet on crowdlending platforms on the web. And the payment is made monthly, just like in banking institutions, with interest.
Note: Today, it is possible to lend between 20 euros and 2,000 euros. Even though crowdlending can bring you big gains, don’t forget that it is also an investment with risk.
What are the right strategies to boost your savings?
The reliability of the platforms is very important. To avoid scams, give preference to those that are registered with the Orias (Single Register of Insurance, Banking and Finance Intermediaries). Similarly, all companies must obtain the status of intermediary in participatory financing (IFP). Once you log on to the site, you will have access to a whole range of offers. It’s up to you to choose the one that suits you best. Nevertheless, study each file in depth in order to limit the risks:
the date of creation of the company: experience plays a major role. Therefore, lend your money to a firm that has been in existence for more than 4 years.
the number of employees: to determine if the box is serious or not
the type of activity: is it profitable at present?
the number of partners: sole proprietorships are more risky because the reigns of the company are in the hands of one person
Finally, don’t forget to take a look at the rating given by the site to judge the reliability of the company.
Note: It would be better to invest small amounts of money to get started. If you have large savings, diversify your investment. Don’t put everything in one basket! In addition, also prefer long-term loans, as the return will be higher. Finally, opt for the company that offers the highest repayment rate.
Good to know!
For crowdlending, all the steps are free of charge. Only the management fees are payable, and are borne by the candidate companies.
You should also be aware that there is a risk of not recovering the interest, and even the capital in the event of bankruptcy of the borrower for example. Therefore, always remain vigilant.