A new trend to be able to invest in large and medium-sized companies that need an injection of liquidity, can be done through the donation of private individuals. This financing model has its origins in the mid-90s. If you are interested in learning a little about this interesting topic, we recommend that you continue reading this article.
From its origin
While it is true that crowdlending is a terminology that has recently begun to be used in the world of finance and investment, it is also true that its origin is closely related to crowdfunding , a financing model that was born over the years 90, which was used by those who wanted to invest in the artistic world.
And it is that at a time when the rise of artistic trends in large cities was beginning, many investors saw a great opportunity to be able not only to support those projects that offered a bit of culture and art, but also to invest in terms of power offer a donation or obtain a reward that was not monetary, such as a work of art or some type of recognition.
Crowdfunding, as the years progressed and the new financial trends and ideal markets for investment, evolved, to become a model more aimed at loans or investments until moving to what is now known as crowdlending , in which individual investors donate their money .
What is crowdlending
As I was previously explaining, crowdlending is nothing more than financing through loans that is made to a company or also to individuals who need cash flow to start a specific project.
The term comes from the English language, where crowd means crowd, and lending refers to loan. In other words, it is nothing more than the financing of that company or individual made through small investments made by several people who lend their money.
It is important to note that the way to return the investment depends on the parties. The most normal thing is that they receive a return on their investment with interest in return, although they also a non-monetary reward, return on investment or a share in the project can be used. Everything will depend on what is stipulated in the contract that both parties sign.
Why is crowdlending recommended
Because we can count on a platform that allows us as companies to have an alternative to be able to obtain financing for our investments. In addition, our investors will be able to have a higher profitability and will have more opportunity to use the money they wish to invest so that they can generate a positive result in their favor.
Knowing that we can have the certainty of having people who know how to handle risk factors and who can present us with investments that are really suitable for us, is very important, and that is, making the decision to invest your money is not so simple, even more so if we do not know in depth about the world of finance .
The numbers speak for themselves
It is no secret that this way of investing has had quite a significant growth in recent years. And is that, according to some studies, crowdlending achieved almost 300 million euros for investment in 2018 alone:
- The number of registered investors was 38,855.
- The average number of shares per investor was 625.
- The money reimbursed to investors was 283,596,537 euros.
- Interest paid to investors was 8,732,845 euros.
According to an analysis carried out on the countries with the highest investment during 2018, the first nation to invest in this model is China, with more than 300 million dollars, followed by Spain. Next, the United States with a figure between 19,000 and 22,000 million dollars, then there is Great Britain with a little more than 3.800 million dollars and finally Japan with 2.100 million dollars.
Advantages of crowdlending
This innovative financing model has as one of its main advantages the fact that it avoids the heavy process of applying for a loan in a bank or any financial institution. In addition, for investors it is not usually that uphill, since with a small amount they can obtain positive results.
- It offers great profitability, with rates above 8% the initial investment.
- It is a safer investment, since companies that are on a crowdlending platform are studied very carefully to avoid losses.
- It is a process that allows to have liquidity, since the collection of interests can be monthly, which means less stress on investors.
- It is a fast and easy way to invest our money in reliable companies that will generate good dividends.
Definitely investing in crowdlending is a good option if what we are looking for is to have better income and do something productive with that money that we have saved and we want to see it grow.