It is almost a fact that on more than one occasion you have heard about Crowdlending , but in reality you do not know what it is. Therefore, today we will know a little more about this term that is very important in the world of immediate loans , since it is about the dilemma of granting or not granting a loan instantly without paperwork to people or for the otherwise, reject it.
This is because for several years that decision will also depend on the Internet, although it may seem strange, it has come to revolutionize the collective finances of companies. And for this, there are a large number of online crowdfunding platforms on the web and the variant that in this case is crowdlending , since they are alternatives that have been generated as one of the best to bank credit.
What is Crowdlending?
In general terms, it is a platform that has its space on the Internet, in which when a person requests financing, especially self-employed persons or SMEs, a group of people can grant them credit in exchange for interest.
Difference between Crowdlending and Crowdfunding
Surely you are wondering then what is the difference between Crowdlending and Crowdfunding , since although they are practically very similar, they do work for different purposes, such as an immediate loan without paperwork or a new credit.
What is crowdfunding?
Crowdfunding is one whose main mission is to finance new business projects, which can be launched through SMEs, emerging companies or also known as startups. They are companies that have great potential for growth and that due to their main characteristics have a high risk at the time of their investment, and for that reason they are outside of traditional bank financing, since banks prefer not to invest in them.
How does crowdlending work?
On the other hand, crowdlending is one of the models that works in a very similar way to loans, that is to say that a company, SME or an individual person can return everything invested by lenders who in this case are investors in a period of time that is agreed in advance. The difference is that they must pay an interest rate that is also fixed. In other words, all those who are part of that platform are investors who, by simply placing their money in some type of business, can obtain a return through interest, as it works with traditional banks.
In other words, with crowdlending, any individual or company can request an amount of money to buy any type of product such as a house, a car or whatever they need to invest in their business and be able to pay it through installments, as if it were an immediate loan without paperwork; with the big difference that you are requesting it from a company that can be considered as intermediate and that the interest that you must pay may vary depending on the investor who places the money.
The legality and drawbacks of crowdlending
Surely you are wondering if crowdlending has drawbacks, and the reality is that as in any other financial institution, because some of the most important platforms force users to have opening commissions, return, portfolio management, non-payment, revocation of Payment orders, insufficient balance, among others. Therefore, a crowdlending institution may not be as good as it seems.
Support based on the Law for the Promotion of Business Financing
Now to the question if these types of platforms are really legal in the United States, the answer is yes, since they have been regulated by the Law for the Promotion of Business Financing. Users are also protected from abuses in this sense, since the law indicates that the administrators of the platforms should not have any type of problem or open trial in the courts and must be very strong organizations.