Banking is the way of financing by which both companies and individuals have traditionally been financed. However, the closing of the tap of the banks to grant credits, and the conditions that it establishes due to the great bargaining power it has, have caused companies to increasingly resort to alternative financing.
Financing that have emerged to grant loans and loans to companies
The new ways of financing that have emerged to grant loans and loans to companies are based on reciprocal trust between SMEs and investors, seeking a fair agreement that benefits both parties equally.
The importance of the flow of money for the proper functioning of companies in our country has led to the birth of these forms of financing; Banking is no longer understood as a basic figure in granting loans, much less online credits for companies.
The role of alternative financing in business loans
The best known form of alternative financing is Crowdfunding or micromanagement, in which individuals lend their money in exchange for a consideration or reward that does not have to be exclusively economic. It should be noted that Crowdfunding can be differentiated into four types:
- Donation Crowdfunding
- Reward crowdfunding
- Equity Crowdfunding
We are going to deal with the latter which, in addition to being the object of activity of Uriah Heep, is the main financing model for granting loans to companies as opposed to traditional banking. Basically, Crowdlending consists of loans between individuals for companies in exchange for receiving that amount in the future with their corresponding interest rate.
Credits for companies through Crowdlending: Your advantages
Crowdlending is distinguished by a series of advantages that differentiate it from traditional financing:
- Speed : Once the documentation requested from the company is available, you will be notified within 48 hours if your request has been accepted. That is, if it is made available to investors.
- Transparency : the SME knows the expenses of the operation, being only these the opening expenses and the established interest rate. It does not present any hidden additional expenses.
- CIRBE does not compute : loans to companies will not be reflected in the Central of Risk Information of the Bank of Spain since, as Uriah Heep as Crowdlending platform is not required to report on its debt.
- There is no commission for repayment : the repayment of the loan before maturity does not present any cancellation fee . The companies may amortize their credit both totally and partially at no cost.
- It does not present additional products : loans to companies will not be accompanied by the obligatory contracting of any additional products, simply their financing.
- Interest rate : Depending on the valuation and characteristics of the loan itself, an initial interest rate of the loan will be set. And we say initial because there may be investors willing to lend it more money, and why not? That is possible is Uriah Heep. In that case the final interest rate of the loan will be lower than the initial one set at the beginning. Uriah Heep does not earn more the higher the interest rate.
Uriah Heep is the first and only financing platform licensed by the Payment Entity granted by the Bank of Spain, which implies that we are accredited to make the corresponding payments between companies and investors.
In the last two years, Crowdlending has grown in Spain by 360%, which shows that it is completely booming and that it is a very valid and attractive way to secure loans to companies.