Banking or participatory financing?

PARTICIPATIVE LOANS BETWEEN INDIVIDUALS

During the crisis, many SMEs had problems because the bank closed the tap of credit in a country in which 97% of loans to companies come from financial institutions, a unit that could go reduced with the emergence of alternative financing formulas.

Among them, stand out the participative loans between individuals (“crowdfunding”), which do not require endorsement but offer an attractive project to investors- Newmonkurerujp i need payday loan.

The problem of financing SMEs has also played a role in the proposals that political parties took in their electoral programs of the last general elections.

On the one hand, the PP proposed to strengthen the mechanisms of alternative financing through a promotion of risk capital and an “effective” regulation of “crowdfunding”.

The PSOE proposed in its program to reduce to 0% the interest of the soft credits of the Executive to finance projects of SMEs related to R & D and, like the PP, would promote venture capital and participatory loans.

In the case of Citizens, SME financing measures focused on the creation of an investment program for small businesses in which the Government is associated with private funds.

For its part, Podemos advocated that help to SMEs to access liquidity through the creation of a public bank and the Official Credit Institute (ICO).

In statements to Efe, the financial advisor for SMEs José María Casero believes that the key to optimizing financing is to diversify the debt, that is to say, it is not necessary to opt only for bank loans or only for the participative ones, but to use both possibilities.

For this expert, the recent credit crisis “has to make SMEs and micro-companies reflect” when choosing their financing, because “you do not have to launch yourself on the grid for an offer from the bank”.

His advice is that you have to “meditate” and be clear about the objectives of that loan in the short and long term.

Regarding new forms of financing, consider that they are “easily accessible”, and remember that participatory loans consist of selling the product and receiving an advance money in exchange for “a good opportunity”.

In this sense, it stands out among the advantages of “crowdlending” or “crowdfunding” that “tend to handle shorter terms than banks in their resolution”, although the interests to which they offer financing depend on each platform or investor.

More Requirements for Financing

In addition, other experts consulted by Efe highlight that banks require more conditions to grant financing, but this does not mean that it is “worse” or “better” than participatory loans, but that it is a characteristic of the sector.

In this sense, the Bank of Spain wants Spanish financial institutions to report “extensively” to SMEs and self-employed when they decide to cancel or reduce the flow of financing, in addition to giving three months notice.

This is established by the agency in a draft circular, which is in public consultation until next December 30.

According to the institution, one of the reasons that hinder the financing of SMEs and freelancers is the “informational asymmetry” that banks face when they grant a loan, which makes it difficult and expensive to assess their risk.

Therefore, both the banking supervisor and experts also recommend SMEs to have clear accounts, the objectives of financing and how they can return the loan to facilitate their access to credit.