Reasons to be tempted by the participatory business loan
If you keep yourself regularly informed about the latest news on savings and corporate finance, you might have heard a term: “crowdlending”. Based on the same principle as crowdfunding, better known and more widespread, crowdlending is also based on the financing of a project by the crowd.
The only difference: it is a question here of financing business projects against remuneration, taking the form of an interest rate. In other words, we are talking about a participatory business loan.
It’s simple, fast and free
With the opening of the banking monopoly by the Macron Law in 2014, the rules have changed. Bankers are no longer the only ones positioned on corporate finance. And the new players to compete directly with them are the Fintechs. Fintechs are start-ups specializing in finance and technology (yes, we are talking about TacoTax).
Their credo: the customer is placed in the center, with quality services, simple and fast. In the context of crowdlending, we are talking about an intuitive Internet platform, where each approach can be summed up in a few clicks to take advantage of the final product: lending to a French SME against remuneration in less than 2 minutes. And unlike some financial products, the service is completely free.
Attractive profitability and controlled risk
The second asset of crowdlending lies in its profitability. At a time when the rates of historical booklets (Livret A, etc.) are at half-mast, where the stock market is scary by its opacity and its complexity, and where cryptocurrencies have left more than one investor on the straw, the least alternative may appear to be an interesting product. With average profitability of around 7% at Good Credit, for example, it is still possible today to grow your savings while controlling your risk.
Risk management is indeed the spearhead of this start-up, which relies on a meticulous selection of companies to present the best projects to its 19,000 customers. By also offering a large number of collections, it offers its subscribers the opportunity to diversify as much as possible its placements on different projects. As the saying goes: never put all your eggs in one basket!
The financial advantage of a business loan is twofold. On the one hand, the pay is attractive but especially taxation has been revised downwards by 1 January 2018. With the introduction of the Flat Tax (or PFU: Préfuction Forfaitaire Unique), the government intends to promote this type of savings solution among French individuals. This rate is made up of:
- 17.2% social security contributions (the original 15.5% + 1.7 point increase in the CSG)
- 12.8% income tax (which replaces the 24% deposit and constitutes the entire tax), i.e. 30%.
A significant 9.5% gain to take into account to easily take the crowdlending step.
A boost for businesses near you
Since the 2008 financial crisis, the traditional banking sector as a whole has lost the trust of citizens. Deemed too opaque, too far from its primary mission, namely the financing of the economy, it no longer attracts the small saver who does not wish to participate in a system he does not understand.
In comparison, the participatory business loan allows individuals to regain control of their savings, to choose with clarity, ease and free of charge how they will make their savings grow. Thanks to a platform like Good Credit, it is now possible to support the SME in your neighborhood with a few clicks: butcher, paramedic, lawyer, craftsman, restaurateur, etc. In 3 years, more than 420 business projects have already seen the light of day!
A booming sector led by the government
“Life insurance and the Livret A no longer earn anything; SMEs, yes! “
This statement by Amélie de Montchalin, deputy En Marche de l’Essonne, and member of the Finance Committee, clearly summarizes the situation. The government wants to bring together two interests:
- that of companies looking for financing
- that of investors looking for transparent and profitable investment solutions.
Crowdlending is therefore supported by the government, which sees a way to boost the economy as much as your savings. It is also with this in mind that the tax system has been lowered, as mentioned above.
And to support you in this process, the Autorité des Marchés Financiers (AMF) has announced the creation of a digital portal. To find, based on your profile, what are the best products available, including investments in SMEs!