Crowdlending is an attractive way to raise capital for small and medium-sized enterprises (SMEs), the self-employed and business people: through online platforms, private individuals also have the opportunity to act as lenders or to lend money without complications. Especially for self-employed and start-up entrepreneurs, who fall through the grid in classic banks, crowd lending platforms can certainly be an interesting alternative.
While crowd lending in the US has been in vain for years, this type of debt financing in Europe is still poorly understood. This will provide loans via an online platform, which are given by private individuals to other individuals (self-employed, entrepreneurs, freelancers, founders, etc.) or to companies. Typical examples of crowdlending platforms in Germany are auxmoney and smava .
Especially for small loan amounts (typically for the self-employed), crowd lending platforms are interesting alternatives to the bank. Since traditional banks are hardly interested in small loan sums up to 50,000 euros because of the high cost of checking the loan for the self-employed , crowdlending platforms hardly compete with banks. Rather, they are a welcome addition to the loan offer. Often self-employed are also advised by the Bank on this credit alternative.
Unlike the banking self can present the Crowd Lending her loan application on a crowd lending platform and thus imagine a broad community and justify in detail. The latter proves to be a big advantage over traditional banks or online credit intermediaries such as Crediter, Creditend and Pixocredit.
While at the bank, the self-employed has to fulfill the formal credit requirements , the crowdlending is a real exchange between credit seekers and private investors. This is particularly important for professionals and founders with projects requiring explanation. In this way, new and forward-looking projects can usually be financed more easily by means of crowdlending than via online loans or conventional bank loans.
Conclusion: By means of crowd lending, self-employed people also have a real chance of obtaining a loan, which would hardly have a chance for banks. For founders, young entrepreneurs and freelancers, crowdlending has become established as an alternative financing option in recent years.