The system of business loans for crowdlending can also be denominated or appear in another form, but always with the same meaning- Payday Now. In this way, we can find synonyms for crowdlending in expressions such as: “P2P loans”, “P2P Lending” or “P2P Loans”. All of the expressions that contain in any case P2P, the abbreviations of peer to peer, or what in Spanish would be “of equal to equal”.
It is also about loans between individuals, where investors invest in projects that require business loans to carry them out and in return, investors receive a return for lending their money.
All these business loans without banking intermediation, directly linking the interests between individuals.
What are the benefits of P2P Lending?
To tell you about the benefits and benefits of P2P Lending, we will clarify it through the Crowdlending platform or P2P Lending MytripleA. As we know, the P2P Lending brings together investors who want to make money with those companies or individuals (self-employed) who are looking for financing of working capital or investment. MytripleA provides benefits to both.
Benefits of the P2P Lending business loans for the investor:
- P2P Lending generate high returns. Thanks to the P2P Lending, investors who wish to capitalize their savings can do so through the MytripleA participatory business loans platform, since, unlike traditional financial operations (such as fixed terms or purchase of public debt), it allows the investor obtaining an average -according to data from the MytripleA operations- is close to 7.5%, while in a fixed term it is at 0.15%.
- Selection of the type of project in which to invest. Thanks to the detailed information in all the investment projects, the investor has the possibility to choose directly in sectors and invest. In addition to choosing the term, quantity, risk and therefore, profitability.
Benefits of P2P Lending business loans for the company
- Speed and agility: P2P Loans or P2P Lending is a much faster and more agile process than applying for a loan through a bank. So much so that in an average term of 48 hours, our risk department will study the request for business loans and give the corresponding feedback or response to the company concerned.
- Better conditions: In most cases – like MytripleA – P2P Lending entails a series of more advantageous expenses and commissions than with traditional banking to carry out the loan. In addition, the conditions of the same tend to be more adaptable and flexible than in operations managed by banks.
- It is not necessary to hire additional products: One of the factors that increase the cost of business loans through banking entities is the obligation to contract additional products and services such as life insurance, home insurance, etc. This does not happen when financing is requested through the P2P Lending.
- Does not consume CIRBE: Something that usually worries some companies that request financing is that their loans and credits consume CIRBE. In the case of loans through the P2P Lending of MytripleA, CIRBE is not consumed, so if, at any given time, you decide to apply for bank financing, you will be much more likely to be granted it.
The way in which this type of P2P Loans are managed is through the so-called crowdlending platforms that, like MytripleA, are in charge of uniting interests between individuals or companies in search of business loans and those in search of profitability, all of online through a web page with a Marketplace where both interests meet.
Infographics Business loans: P2P Lending & P2P Loans in Spain
What can we say about the P2P Lending or P2P Loans business loans platforms?
To prepare this post, a small study has been made of the existing P2P Crowdlending platforms in Spain as well as some of their corresponding marketplaces.
Platforms business loans: P2P Lending and its creation
Currently, there are 8 P2P Crowdlending platforms in our country and all with a very short life. The oldest began operating in 2009, however most began to carry out their activity in the period between 2012 and 2014 which is when the phenomenon P2P Lending had a greater boom and crossed our borders with force (since it had great importance in countries like England, where there are many players in the P2P Lending market)
Purpose of the P2P Loans
Of the P2P platforms that operate in our country, 75% manage only the financing of business projects, leaving out the personal ones. The rest, 25% accept both types of projects, both personal and business.
The term of the P2P lending
Regarding the term, all of them include in their marketplaces both short and long-term projects, with the exception of one of them that focuses only on the discount of promissory notes for companies and does not exceed, therefore, the term of 12 months.
The minimum amount of investment in the P2P Lending platforms
As for the minimum amount with which an investor can start trading on the platforms, 60% give the possibility to invest from € 50, the rest are distributed in amounts of € 100, € 20 or € 25. So that person who want to start their journey in the world of investments, they can start doing it through the P2P Lending platforms and observe how their money does not stop growing.
What can we say about the projects of the P2P platforms?
They have chosen between 3 and 4 projects from each of the platforms, making a total of 29 projects analyzed to know some details of them.
The P2P sectors
As for the sectors to which the companies that apply for business loans are dedicated, we can see that among the projects analyzed, they are shared equally between those belonging to the tertiary sector and those belonging to the secondary sector. Around 42% of the projects financed belong to the tertiary sector, and another 42% to the secondary sector. In third and fourth place are the personal projects that represent 7% and finally those companies that belong to the primary sector that represents 3.44%.
The term of the P2P loans
Referring to the term of the selected projects, we see the following:
- Most, 48.2%, have a term of fewer than 6 months.
- Deadlines of more than 5 years only represent 3% of the projects studied.
- 14% are between 2 and 3 years.
- 10.34% of the projects have a return period between 1 year and 2 years.
- 3% is included in a period between 6 months and the year.
Purpose of the P2P Loans
After knowing the purpose for which funding was requested in these projects, we can say that most of them – 34.8% – are destined for the end of working capital. Secondly, with 28%, the requested funding is used for investment and, lastly, in 14% of the projects financed, the amount received is directed towards discounting promissory notes. As we can see, the loan request for the purchase of working capital is the most requested, these projects were also shorter.
Amount of P2P Loans
The total amount of money requested in all projects totals € 1,404,530. Recall that the number of projects we have studied amounts to 29, so the average business loans requested per project is € 48,000. However, those that represent a smaller amount are those loans classified as personal that are around € 2,000 or € 3,000, while the projects that require the largest amount are investment loans, around € 100,000. As for the currency, the amount requested varies widely from one project to another but is usually around € 35,000.
Profitability of P2P Loans
The average profitability of the group of projects analyzed is 8.87%, with personal projects being the most profitable given their level of risk, in some cases accounting for 18%. The lowest profitability among the projects analyzed was 4.50% from an investment project for a tourist complex.
Risk rating of P2P Loans
Regarding the qualification of the projects, the most common is the B qualification, however, this will vary according to the platform in charge of analyzing it, since each one can use different criteria to grant the qualification.
Guarantees of the P2P Lending
Most of the guarantees, if they come from a business project, attend the majority partner or partners. If it is a personal or autonomous project, these guarantees usually come from third parties such as the spouse or first-degree relatives.
Cheer up and get to know the P2P Loans first hand!