Wages or salaries are usually the sole source of income for indebted workers. Creditors know this and invest here to collect their money. You arrange salary garnishment, which attaches directly to the employer. The seizure of labor income is a very common foreclosure measure.
The salary garnishment: What is it and how does it work?
In the salary garnishment, the employer must participate. He must withhold the attachable portion of the net income and forward it to the creditor of the employee .
The creditor may only order such an attachment through the employer if his enforcement order has been served on the debtor and on the basis of which he has applied for a seizure and remittance order to the court.
Wage seizure table and seizure limit in salary
Each executor must remain at subsistence level. So not the entire wage may be seized. Where the monthly salary garnishment limit depends on the amount of each income and by how many people is committed against the debtor for maintenance.
A tool for determining the attachment exemption limit is provided by the wage garnishment table . These receive workers at their debt counseling. As an alternative to the garnishment table, the amount of salary garnishment can be determined online with a computer .
Debtors can submit an informal application to the enforcement tribunal for an increase in the seizure limit and attach a certificate of the amount of necessary living needs.
Stop salary earmarking
How can you prevent salary garnishment?
There are several ways to prevent or stop the garnishment of salary:
First, debtors can pay their debts to the creditor, so there is no reason to seize.
Creditors may also agree on an agreement or a settlement, eg. For example, by the debtor offering them an installment payment .
A personal bankruptcy would end the salary garnishment.
To find out which way is best for you, you can seek advice from a debt counseling service.
Tips and right behavior in a salary garnishment
Garnishment: What do I tell the employer?
Inform your employer of the impending enforcement action. Only in this way can you maintain the basis of trust between you. As a rule, a salary garnishment does not justify a termination. Only employees in a position of trust such as managing directors or cashiers may be terminated.
Salary earning & maintenance
With a salary garnishment applies: Maintenance takes precedence. If the employee is obliged to support one or more persons, the employer must take this into account in the allowances. Therefore, check carefully whether all dependent persons have been considered.
Proper calculation of salary garnishment
In a salary garnishment, inform your employer to build a foundation of trust.
The employer calculates the attachment exemption amount. He also has to differentiate between attachable and unpaid labor income .
The Land Labor Court Berlin – Brandenburg decided in 2015 that the employer must pay collectively agreed supplements for night, Sunday and public holidays despite salary garnishment to the employee (judgment of 9 January 2015, Az. 3 Sa 1335/14).
If necessary, seek the assistance of a recognized debt counselor or lawyer to protect your wages as much as possible from seizure.
In this article we are going to analyze how mandatory cross-selling increases the cost of financing traditional banking, we will see what is the real cost of financing through traditional banking and we will compare it with the cost of financing through traditional banking. of alternative banking; Above all, we will focus on compulsory cross-selling and on those hidden costs that force us to assume traditional banking when we ask for financing and which, in the end, always translates into a very significant increase in the cost of financing.
For this we are going to use a special report that INBONIS has drawn up recently and that it has published on its website .
Who is INBONIS?
INBONIS, a recently created FinTech company that was incorporated in October 2015 and started its commercial activities in March 2016, is managed by a large multidisciplinary team with extensive experience in financing and managing small businesses.
Therefore, INBONIS is a company that was born with the vocation of financing SMEs (remember that in Spain there are more than 1.3 million SMEs, representing 65% of GDP and generating almost 70% of existing employment) and that it will do so by granting loans, ranging from € 25,000 to more than € 250,000, and which are to be repaid in a short-term amortization period ranging from 6 to 12 months. They can be provided only with the guarantee of the company (that is, there is no need for personal guarantee in many cases) and this is thanks to a study that is made of the credit of the company through a special program that INBONIS has created. It allows you to calculate the risk perfectly.
In the study process INBONIS analyzes the cash flows of the SME requesting financing, analyzes the commitment of the entrepreneur and also the recommendations of its environment to be granted financing and based on all this INBONIS will set an interest rate u another to the loan granted.
Since this past February, INBONIS is offering loans to SMEs that are being managed by their owners and have a turnover of over 100,000 euros and, in this short period of time, has already granted loans to more than 80 companies and all at a supercompetitive cost of 7% on average, including all costs.
What is the real cost of financing through traditional banking?
INBONIS did a study and found that the cost of financing SMEs (despite the facilities to obtain financing at low cost that financial institutions have thanks to the ECB) has not dropped 6% at any time and that has meant paying an extra cost that is twice what German SMEs pay, for example.
With the lowering of interest rates, financial institutions reduced their financial product rates a little, but this decrease compensated in another way and it was raising commissions and forcing SMEs to contract many of their financial products if they wanted to be granted. the requested funding
Thus, according to the report of INBONIS , the initial cost of financing offered by traditional banking must be added up to an additional 4.6% according to the ECB and another 2% in various commissions, such as study or opening, for example, and 0.25% for the amounts of unused funds and this should be added mandatory cross sales (life insurance, direct debit and tax or pension plans or credit cards) that would increase the cost of financing another 1.3% and, finally, it would also be necessary to add the cost of the personal guarantees that force you to assume that they represent an additional extra cost of more than 2%, that is to say, adding up all the cost of financing through traditional banking to the SMEs can exit at the end for a cost higher than 10% above the price of money.
How are SMEs financed in Spain?
Mainly through traditional banking in more than 95%, while in other countries it is already beginning to see that SMEs resort to alternative financing, such as Crowdlending, for example, and thus in the US and 70% of the SMEs come to seek money in non-bank sources and in France or Germany they are already more than 50 and 40% respectively, while in Spain barely if it is tried by just over 20% of SMEs.
The new FinTech investment and financing companies are growing like foam and this is thanks to they do not force compulsory cross-selling to grant financing, because they are much more transparent and agile when it comes to processing “paperwork” for the granting of financing (the entire process, even the signature, is done in a online) and, finally, they are much cheaper than traditional banking, they demand less real guarantees and even better value the SME risk through the modern study techniques and risk assessment programs they have developed.
Example of calculating the cost overrun for commissions: Thanks to the INBONIS Simulator we will calculate what the real cost of a loan of € 10,000 would be to return to the initial 6% and within a period of 12 months but that it has a study commission of 1 % and an opening commission of 1% and you will see how the APR is increased up to more than 10% and that without counting other possible costs, as if you had to offer personal guarantees or you had to suffer a mandatory cross sale, because in In those cases, the total final financial cost would be even greater.
In this article we are going to talk about something that has become very fashionable and that is the investment in Bitcoin and we are going to compare it with the investment in Crowdlending to see which of the two options is better and more recommendable.
Invest in Bitcoin
First of all, in my defense, I will say that I am not an expert in cryptocurrencies and that I do not know exactly what is this Bitcoin , but I will try to explain what I have understood of how much I have read and I have I’ve heard about it, so if I’m not entirely correct or I’m not academically perfect in my presentation, I already apologize to all our readers.
The Bitcoin was born back in 2009 by Satoshi Nakamoto, a name that was put by a programmer, or a group of programmers, to announce the creation of Bitcoin and that we could define it as a digital currency that has an open source based on a technology called blockchain (chain of blocks where all transactions are reflected as if it were an accounting book) with encrypted protocols that make them unforgeable and that makes the same Bitcoin can not be used several times at a time. double spending is prevented; therefore, in short, it is a digital currency that is issued in a decentralized manner (there is no Central Bank or any government behind) and which serves as a means of payment if the seller accepts these Bitcoins as currency.
Therefore Bitcoin is a very anonymous means of payment and this lends itself to its use to make transactions of dubious legality on the part of the delinquency, but, at the same time, the Bitcoin can also be object of investment in itself since ” per se “the Bitcoin has a certain value to the change in currencies (euros, pains, yen) which goes up and down depending on the supply and demand that there is in the market; so much so that recently a Bitcoin has come to be worth more than $ 20,000 when a year ago they were not worth a thousand euros and two or three years ago they were not worth $ 100 each, this has made us think that this is a speculative good that has led to the formation of a speculative bubble (like the dot-com bubble, the real estate bubble or the tulip bubble) and that, like all bubbles, we know that it has been formed and that it really exists, but that we do not know when it will definitely and when will take all the “last investors” unwary ahead.
Since behind the Bitcoin there is no central bank, no government, or anything to back it, many economists think that its value is close to zero and that all this is the result of a speculative investment fever that will happen someday, but there is also other experts who believe that this technology has come to stay and that will change over time, but it is sure that it will stay and that it will be a whole new technological revolution as it was the birth of the Internet.
Therefore Bitcoin is a very insecure investment that can be very lucrative , but that presents a lot of volatility and uncertainty and that, therefore, is not recommended for investors of low risk profile. Investing in Bitcoin is a lottery in which you can earn a lot of money, but you can also lose it, there is nothing safe, so putting our money there is a high risk operation, it is a real Russian roulette in which we can win big amounts or lose up the shirt.
Invest in Crowdlending
However, investing in Crowdlending is much safer than investing in Bitcoin because behind the investment in Crowdlending there is a company and a whole risk analysis team belonging to the Crowdlendin g company that investigates exhaustively what the solvency of the companies is. companies requesting financing, this team investigates the data that the promoters have deposited in the Mercantile Registry , they investigate if they appear in registers of defaulters as in the ASNEF (National Association of Financial Institutions) or in the RAI (Registry of Unpaid Acceptances) for example ; they also investigate what their debt ratio is by requesting information from the Bank of Spain about the debts that this company has contracted and that are included in the CIRBE (Risk Information Center of the Bank of Spain) and, for more security, if possible, there is already Crowdlending companies that even offer repurchase guarantees that are activated in the event that the developer stops paying his loan.
Investing in Crowdlending is also quite profitable since you can get double-digit returns of up to 12% and even higher and it is quite liquid because you are charging your loan repayment installments plus interest every month and if you want to recover your investment before the end of the year. expiration, you can do it by selling your debt participation to another investor in the secondary market that many Crowdlending platforms already have available to their investors.
In addition, the Crowdlending companies by law must have the accounts segregated , so that if the company goes bankrupt the investors’ money would be outside the company and they also have to have an external service hired to carry all the pending operations until your full repayment term has ended and all investors have collected their outstanding contributions.
There are two types of long-term financing of the Company, which are Own or internal Financing and External or External Financing. Then in this article we will talk about all of them so that readers have knowledge of what these sources of long-term financing are, where to request them and what each of them is used for.
1.- Own or internal financing . Own financing is provided by the company and the partners themselves in the form of Social Capital when they constitute the company or when they subscribe a capital increase and internal financing is generated through the activity of the company and which are benefits that they are not distributed and reinvested in the company in the form of Legal or Voluntary Reserves or by means of the provision of expenses for the Accumulated Amortizations of the Fixed Assets and by the provisions for Provisions for future foreseeable and feasible expenses or losses, which are endowed to cover said contingencies and to recapitalize the company.
2.-External or external financing. Are those funds that come from external sources outside the company and can be of different types depending on where they come from, such as: Traditional Banking Financing, Financing through Organized Markets, Financing through Public Entities and Bodies and Financing through another types of alternative financing channels such as Crowdlending, etc.
The financing coming from Credit Institutions, are those that come from entities that we know as Banks, Savings Banks and Credit Cooperatives, which are financial entities that offer financing to companies of many types, but in this article we are going to focus on Long-term financial products whose repayment term is greater than one year.
7 Long Term Financial Products
1.- Long Term Loans. The financial institution lends the company a certain amount of money, with personal or real guarantee (mortgage), for a specific period of time and at an interest rate agreed by both parties. The loans are usually used for expansion investments, purchase of investment goods or the launching of new business projects. There are many types: loans for export projects, for the acquisition of fixed assets, for the expansion of production facilities, etc.
There is also the possibility of obtaining financing through the presentation of investment projects to the Entities and Public Bodies that study them and if the requirements are met, they can grant you an Aid can be non-refundable, with partial or total refund. Subsidies are grants and may be to capital, to finance investments, or to the activity and are granted by the local, community or state Administration.
Some entities that process and manage the grants and subsidies are the ICO ( Official Credit Institute ), the CDTI ( Center for Technological and Industrial Development ) or ENISA ( National Innovation Company ) and in all the Autonomous Communities and City Councils .
2.-Financial leasing: It is a type of financing in which the lessor agrees with the lessee through a leasing contract, the right to use an asset in exchange for the payment of monthly installments for a period of time exceeding one year. and that, at the end of it, the lessee can return the good or pay the residual value and keep it. With the leasing contract you acquire the right to use, but the property does not, until you exercise the option to purchase at the end of the contract. This is usually a good form of financing to start the business, since it allows you to finance yourself initially without having to spend large amounts of money.
3.- Operational leasing or Renting: In this form of financing the figure of the distributor disappears, so that the one that puts the good in disposition and the one that collects the monthly installments is the same entity. In this case the thing works as a Long Term rent, in which the property of the property is not ours but for its use we pay a rent in the form of installments and that go to the expense account of the company directly and that are fiscally deductible. The Renting company takes care of maintenance, repairs, replacements, taxes and everything necessary to make everything work perfectly. When the contract ends, you have to return the good object of Renting and you can exchange it for another with the same characteristics, signing a new contract for Renting.
4.- Company promissory notes: The company issues a mercantile document, which is a credit instrument with a commitment to pay in writing and a certain term and for a certain amount of money. The promissory note guarantee is the company that issues them and is a product with a high security of collection since they are usually issued by large companies. If a default occurs, a Notarial Protest should be made and legal actions taken to claim the amount of the promissory note plus the corresponding expenses.
5.- Issuances on the Stock Exchange and other Organized Markets : Like the MARF, Alternative Fixed Income Market or the MAB, Alternative Stock Market , which are born to provide financing to small and medium-sized companies. On the stock exchange, the company can obtain financing by issuing shares on the stock exchange and thus obtain fresh resources for the expansion of its activity. To do so, it must comply with a whole series of very cumbersome requirements that are controlled by the CNMV (National Securities Market Commission).
6.- Obligations and Bonds . They are also titles that represent aliquots of a private debt that the company assumes against the bondholders or bondholders who acquire it and who are the ones who lend their money in exchange. The obligations have a long-term maturity over 5 years, while the bonds are usually issued with a maturity period of between 18 months and up to 5 years. In order to issue Obligations and Bonds, a series of fairly severe requirements have to be met, so this type of financing is only indicated for medium and large companies. They usually subscribe to investors who like the term lake and who want to invest their savings with full guarantees in solvent companies to guarantee the return on investment.
7.- Crowdlending. This is what is known as crowdfunding and consists of a massive financing of small investors who contribute their money as an investment or loan to return with interest (Crowdlending). Normally it is usually a Short Term, but there are also financing for more than one year, 36 months, for example. For those who are more interested, please read this article where we explain
The investment in Crowdlending is a fairly safe investment, especially that of Crowdlending aimed at financing companies, however, like any investment, there is always an associated risk and in this article we will explain how to invest in Crowdlending with guarantees .
First of all we have to look very well through what Crowdlending Platform we are going to invest because it is not the same to invest through a Platform that is obliged to comply with the requirements of LAW 05/2015 of April 27 of Promotion to the Business Financing to invest through another Platform that, because it is based abroad, does not have to comply with the obligations that must be fulfilled by those that are located in Spanish territory, and if someday it is time to litigate, it is much easier to do so if the Platform and the financed company are located in Spain if they reside abroad.
Second, we must take into account that Crowdlenidng companies have good Risk Departments with extensive experience in solvency analysis. We must pay attention to the fact that they have been granted the mandatory CNMV License to be able to operate as Participatory Financing Platforms (PFP) in Spanish territory. and we should also make sure that the Crowdlending platform, through which we are going to invest, has the accounts segregated in an external company so that in the event that the company goes bankrupt, its money is always safe outside of the Balance of the Crowdlending Platform.
Requirements that the Law imposes to comply with Crowdlending Platforms
The law = / 2015 obliges the Crowdlending Platforms to:
1.-They must have their registered office and their effective administration, in Spain or in any EU country. If you are not in Spain and the platform advertises or captures customers here or directs their services specifically to investors and developers resident in Spain, they will also be subject to these regulations.
2.- It must be a mercantile company constituted for an indefinite period.
3.- You have to fulfill one of these three options:
3.1.- Must have a capital exceeding € 60,000 paid in full in cash
3.2.- Or you must have a liability insurance of € 300,000 for damage claims and € 400,000 for the total number of possible claims
3.3.- Or it must have a combination of social capital and civil liability insurance, guarantee or other similar equivalent guarantee or that equals the level of coverage required in the first two options.
4.- When the sum of the loans intermediated in the Crowdlending platform rises more than € 2,000,000, the Crowdlending company must increase its capital to an amount equal to or greater than € 120,000.
5.-Administrators should not be prosecuted and be honorable, not be disqualified from holding office, then Crowdlending companies should have a very good administrative organization that ensures the correct management, confidentiality, capacity and reliability of the activity to be able to provide the services offered and must have a mechanism in place by which, if the company has to be dissolved because it is not viable, the Crowdlending company will have to hire an external entity (a consultancy or a law firm) to manage it the loans in course and until their total amortization.
Thirdly, it is advisable that we analyze the company to which our money is going to be allocated to see if it operates correctly in the market and is solvent, it would also be advisable to analyze the project to see if it is viable or not, and finally, that if we see that there is some risk of not investing anything or investing a lower amount than we originally planned to invest in a principle.
In fourth place we must invest in those investments that the Crowdlending company has qualified as quite safe with A or B rating , if we invest in C or lower rating projects, it is sure that we will earn more money by running more risk, but we have a high possibility of losing our investment because of the greed of wanting to obtain a very high profitability.
Fifth to say that we should invest, preferably, in those platforms that require real guarantees to the promoters of doubtful solvency and in those that offer clause of guarantee of repurchase so that, in case the borrower does not pay, it works as a hedge of real risk and activated in case of default because, otherwise, we could lose all the capital invested.
In sixth place to invest in Crowdlending with security, the best thing is to invest little money in many different investment projects and in many platforms, that is, to diversify a lot, and it is good to do it because with this strategy, in case of any failure, With the rest of the successful investments, we will compensate that punctual loss excessively and thus our total net earnings will always be positive.
We will explain in this article how to get rich through Crowdlending . Being rich, according to the RAE (Royal Academy of the Language) is to be wealthy or wealthy and says that wealth is an abundance of goods and precious things. Therefore, to be rich we have to accumulate money in a large amount that allows us to acquire sufficient wealth so that we can live without economic problems and that is precisely what we will achieve by investing in Crowdlending.
In the world there are the “always rich” and the “new rich” if we, unfortunately, do not belong to the first group, we always have the possibility of joining the second group, making good and diversified investments in Crowdlending that surely it will produce enough income so that you do not have to work in any productive activity anymore.
What are some ways to become rich one day?
The first way is to be already previously, but if it is not you, we will expose the different ways that exist to become rich one day . We are not going to expose here the multiple ways to become rich committing criminal acts but the different ways of doing it in a legal and honest way, contravening all the beliefs that say that to be rich you have to be an amoral who does not have to tremble the pulse if you have to skip the law and ethics to someday achieve your ultimate goal of becoming and being rich.
Let’s see then what are the ethical and legal ways of getting rich.
1.- By cradle.
As we said at the beginning, this is the most natural and simple way to become rich, but it turns out that it is not in our hands, it is rather the result of chance because in order to become rich in this way you need to have been born in a rich family and then inherit a large estate. This is a necessary but not sufficient condition, because how many times have we not heard that the grandfather founded the empire, the son developed it and the grandson fused it and sank everything, therefore, a heritage can be transmitted but the keys of success, talent and effort, no.
2.- By marriage.
What is vulgarly known as ” stick a brag .” If you marry the right woman or man, your fortune can increase considerably, even when the marriage dissolves, which is why many good-looking girls marry decrepit, wealthy elders. However, as a result of many scandals that have occurred in serious divorces in which the husband or wife has been viciously plucked by separating from their partners, people have already learned and now before marriage they sign complicated contracts with marriage agreements that what they come to say is that “mine is mine and yours is yours, before marriage, and also afterwards, if we separate, you leave with yours and me with it, plus a” small compensation, of course “
There is also the ” Property Separation Regime” that consists of what each consort is for each consort, in such a way that if one does business badly, it does not have to affect the other’s estate and that can agree, before contracting marriage, by mutual agreement.
3.- By chance.
Not only because you were born by chance in a “good family” you can get rich, there are other forms of chance that can lead you to the same place, for example, lotteries, pools, euromillions, the primitive, in short, that there are many games of chance sponsored by the state to raise and if you are very lucky and you play, you can become a “new rich”. But make no mistake, the possibility of that happening is very low, the possibility that we get a “fat” prize is one among many millions , but it is not impossible (that’s why they call it chance) and that is why even Mathematicians play the lottery. However, you should always play with idle money and never in a professional way, this would be a mistake that instead of leading us to be rich would lead us to ruin by being addicted or addicted to gambling.
4.- For talent.
If, by luck of fate, we are talented physically, intellectually, economically or artistically, it will not be very difficult for us to convert this intangible fortune into hard cash . We can be a great soccer player, a great singer, a great economist or a great scientist, write books, give lectures, found institutes, in short, we can apply our talent to the specific area in question in which we stand out and thus make an initial money that then, through the correct and timely investments and reinvestments, we could multiply it until some day we can be considered rich and we can stop working to live and dedicate ourselves to doing what we like to do.
This is where the investment in Crowdlending comes in . If we already have a small capital saved, through a correct investment and reinvestment of these funds, we can get a capital that will only grow and grow constantly due to interest, to the point where a day will come when you will not have to work anymore, a day when you can live perfectly on the returns that you rent all your multiple investments in Crowdlending and it will be at that moment when you will remember this article that you are reading and you will say: Wow, what good advice that guy gave me and what a good investment it was to read ” How to get rich through Crowdlending” !
It is very easy to know how to make money investing in Crowdlending , for this you just have to read this article because here you will get all the necessary information to start investing in Crowdlending obtaining a good profitability and security .
To do this you only have to open an account in a Crowdlending company by registering in your Internet web platform , there you just fill in the tax information that they ask for and provide the necessary documentation that identifies you, then, from your bank account, you can transfer the Necessary funds that you create convenient to your newly opened account in the Crowdlending company and that’s it; Then, you can start to invest in Crowdlending loans with which you will help finance the different projects that are published in the Marketplace of the Crowdlending Platform and that are of interest to you, either because you like the type of performance that they offer or because it is a project that interests you because it is ecological, because it is highly technological, because it is based on fostering a sustainable real economy or whatever it may be, the reality is that you will always have at your disposal a large number of projects in which to invest.
After the investment is made, you only have to wait to receive every month in your account all the repayments of the loan capital and all the income from the generated interest , interest and capital that we can withdraw as soon as we want, if we wish, or we can reinvest in other projects with what would produce the famous multiplier phenomenon of compound interest that consists in that (while simple interest grows linearly) with compound interest interest generates more interest and this produces a multiplier effect that makes our Investment grow exponentially.
Let’s give an example:
We invest € 60,000 and take the option of ” Autoinves t” offered by some Crowdlending Platforms and that is nothing more than a computer program through which the same system automatically reinvests our capital and profits again and again, once and again again, and it does so following instructions that the investor previously gave him. Let’s also suppose that we also invest an additional € 100 each month (who can not invest a hundred euros a month?) In our Crowdlending account (that is, we would add an additional € 1200 to the initial investment of € 60,000 a year) and suppose we have given it the instruction to the Autinvest system so that it only invests in quality projects with a rate of 8% per year and for 20 years ; let’s see what accumulated capital we would have obtained at the end of those 20 years.
We see that our initial investment of € 60,000 plus our additional contributions of 1200 @ per year (€ 100 each month) will have generated more than € 250,000 in interest, specifically € 252,923.43 and that in total we will have accumulated a capital of more than € 300,000 , specifically a total of 336,923.43 euros. Is not it wonderful???
So you know, I do not know what you are waiting for, invest in Crowdlending now !!! There are platforms, such as the Latvians of the Baltic countries, which even offer interests above 12% and with a repurchase guarantee that, in case of default by the borrower, they will return the money and interest; Imagine if, instead of 8%, in the equation we put that. during those 20 years. We are going to earn 12% per year, let’s see what would come out then:
Well it would come out that we would get more than half a million euros in interest , specifically we would get a total return of 586,763.32 € and that we would have a total amount accumulated for our retirement of 670,763.32 €, which is not bad . I know it seems incredible, but the multiplier effect of the compound interest is wonderful and, therefore, if we apply the Autoinvest to our investments in Crowdlending and do not touch anything during all that time, here also the same effect will be produced, exactly as if we put those € 60,000 and the additional € 1,200 per year in a fixed-term bank account .
There are several companies that have this tool from Autoinvest , one of them is VIVENTOR , a Crowdlending platform based in Lithuania that also has a secondary market and also has an automated investment system called Autoinvest . In this system you enter the parameters you want and thereby fully automate your investment, reducing the risk, saving time and in this simple way you make your money is constantly working for you without any effort and for as long as you decide .
There are also other sophisticated computer tools to manage the automation of your investments, such as LendingRobot, which is a very powerful self-investment tool that works perfectly; is a tool used to operate with Crowdlending platforms as important as LENDING CLUB , PROSPER or FUNDING CIRCLE ( Funding Circle no longer operates in Spain but it still operates in the United Kingdom, the United States, Germany and the Netherlands) and is characterized by its a large number of filters that you can define to your liking and that is also characterized by using an algorithm that will allow you to increase your profitability without having to learn to make good filtrations since this tool has pre-established filters to automatically use if you define yourself as a “conservative ” or ” aggressive ” investor, and thus you will save yourself the work of having to be predefining, every two times, the investment criteria.
Both the Crowdlending platforms and the investors do not want to hear about the delinquency of the borrowers, but we already know that any investment carries a risk of loss and in this article we are going to talk about how it can be avoided or, at least, minimize the risk of default and loss, both for platforms and investors.
For Crowdlending Platforms
To avoid or minimize delinquency in Crowdlending platforms, three basic premises must be followed:
1.- Have a good risk department . This is basic and fundamental. It should be a department composed of technical and professional staff that comes from the bank and has extensive experience in risk assessment, also must be well trained in accounting and balance analysis to understand the annual accounts of the promoters requesting financing ; they must know how to dive in public registers such as the Mercantile Registry , the CIRBE of the Bank of Spain and in registers of private defaulters such as ASNEF , BADEXCUG or the RAI and must know how to do it because knowing that the financing applicant is solvent in all those registers and has its annual accounts healthy, the Crowdlending Platform will ensure that the chances of that client falling into insolvency are minimal and so it is very likely that the investor will get the return of the capital invested in the form of a loan plus interest and that the platform copper its commissions without problems.
2.- You must control for what the promoter uses the money obtained in the form of a loan through Crowdlending and for this you must verify that the developer has used it for what he said in his application that he was going to use it , that is, the Platform of Crowdlending should request from the developer the necessary documentation that proves that the money obtained has been effectively used to finance the good or project that was specified as the reason for the loan, so that if the loan was for the purchase of a machine, it should require a posteriori to demonstrate, by means of the corresponding invoice, that said machine has been effectively purchased. Although many platforms do, unfortunately not all Crowdlending Platforms usually do this type of checks and they do badly, because if they found that the promoter has assigned it to something else that it was not, that means that it has lied and that should be make it in your file to discriminate negatively in future applications for funding, if they pay the present, of course, because if they do not pay, cross and scratch forever.
3.- Request real guarantees . Some companies of Crowdlending, when they have doubts about the solvency of a promoter requesting financing, what they do is ask for a real guarantee to the Administrator of the company or they ask it directly to the company in such a way that, if it were the case that the loan is not paid, at least, there would be a real guarantee to throw away to be able to collect what remained pending from said loan. It is prohibited by Law 5/2015 of Promotion of Business Financing to apply for mortgage guarantees for the granting of a loan through Crowdlending, but it is allowed that any other type of real guarantee admitted in law may be requested.
For the investor.
In order for the investor to minimize the risk of losing his investment due to the delinquency of the promoter, what he must do is also analyze on his own the company to which he will lend his money , especially if he is going to lend a significant amount; Of course, the investor will say that this task is already done by the Crowdlending Platform, and it is true, that’s right, but if it is your money that is at stake, it would not hurt for you to do your research and analyze yourself. a little the company to which he is going to finance his project; I would check if it is well listed on the Stock Exchange, if it is heavily indebted, if it has payment problems with suppliers or workers, if it has legal incidents or commercial problems are engulfed, what is its reputation in the market of the sector to which it belongs, in order , I would do a small study that guarantees me that the company is serious, that it has been in the market for many years and that it is dedicated to trade in a serious and responsible manner.
Another tip is to fully diversify your investments , that is, if you plan to invest € 10,000 in Crowdlending, the advisable thing to minimize the risk of losing your investment is not to invest everything to a single loan, but to cut the investment in many different loans, that is, it is better to invest € 100 in 100 different loans than € 10,000 in only one; In this way, if any of them falls into default, the profitability of the other investments will compensate for this loss of leftovers and will allow the average profitability of the investments in my portfolio to remain good.
Finally, to avoid losses, you should invest in those Crowdlending companies that offer repurchase guarantees , that is, invest preferably in those platforms that, in case the borrower does not pay, will commit to buy back your investment and return it to you. your money; and if your Crowdlending platform does not have a repurchase guarantee then, at least, notice if you have a secondary market where you can sell your debt participation to another investor, before that loan goes unpaid (I wish we had a ball crystal and we knew that loan will fall, everyone would sell before, but it is impossible, the one that stops paying does not notify, stop paying from one day to the next and period) Finally say that the secondary market is often used rather to sell and recover liquidity before the final maturity of the loan but if you believe that a loan X from your portfolio will fall, you are obviously entitled to dispose of it in the secondary market before the default occurs.
Civic Banking is a new way of doing banking (just as Crowdlending is also a new way of financing and investing) whose ultimate goal is not to obtain the maximum possible benefit, but also seeks a social objective to support the economy real sustainable and not just help them to always be more and more rich.
So the Civic Banking and the Crowdlending companies are gaining ground to the merciless traditional banking thanks to the fact that they are supporting companies and entities that with their activity not only seek a commercial profit but also seek social benefit through environmental projects or that serve to remove a certain segment of people from the poverty line.
Civic Banking in Spain
In Spain more than ¾ of the financial activity is controlled by traditional banking and this is shown by the fact that only 6 banks already control more than 80% of the savings of all Spaniards and this makes them have the monopoly of the concession of loans since they are the ones who have the money, at least the largest amount of it, and the only thing that traditional banking looks for is to place it to the powerful at the best possible interest, forgetting about the most disadvantaged classes and SMEs.
As a response to this monopoly and this injustice, Civic Banking is born and, in part, Crowdlending is also born, both sectors seek to break this monopoly and Civic Banking, in addition, seeks to promote the social economy, real and sustainable.
For these reasons there are already many investors who are interested in depositing their savings in this type of Civic Banking, because the saver is no longer satisfied with being quiet with the entity where he deposits his savings but also wants to know where these funds are allocated , that is to say, they no longer only look for the security and profitability of their deposits, but also that their savings are also destined to projects that create employment, that help to the labor formation and the insertion of people at risk of exclusion, to create companies that be respectful of the environment with clean and sustainable production processes that do not generate pollution and waste is recycled in an appropriate manner without dirtying the environment.
Function of Civic Banking
The Banca Cívica is in charge of controlling that the savings of its depositors go to social projects and it is dedicated to inform, in a transparent way, to its savers the destiny of their deposits and what is being financed with them.
The Banca Cívica is dedicated to financing projects of social utility in advantageous conditions, to recover the amounts invested in a flexible way and to promote and support this type of investments through offers of financing with excellent conditions.
However, the money invested must be invested head-on, that is, it must be invested in projects that are of a social nature but are viable, because otherwise Civic Banking could incur large losses that could jeopardize its future viability .
What products does Banca Cívica market?
One of the products that the Banca Ética commercialises and that has had the most fame is the one known as Microcredit , which consists of a small amount of money that is lent so that the individual can set up a small business or similar to survive and be able to take out his family forward; it is usually granted without the minimum guarantees required and only with the condition that the person commits to return it as he begins to generate resources through his investment financed by said Civic Banking.
Other products always carry the tagline of ” solidarios “, despite being similar products that traditional banking also offers, such as booklets and current accounts of solidarity savings, solidarity investment funds, solidarity cards or solidarity loans , all have as a common link that are used to finance social projects.
Civic Banking, therefore, is another way of doing banking that puts social goodness before private benefit , it is a bank that applies a new ethic to the banking business, a new alternative banking that seeks to satisfy other needs, the needs of people, of citizens and the sustainable real economy.
That’s why what most often finance Civic Banking are projects related to fair trade, culture, renewable energies and the environment , that is, with activities that are good and that do not produce negative consequences in our social environment and environmental.
That is why Civic Banking will never grant credits for consumption, nor credits to finance companies dedicated to armament, to nuclear energy, to the exploitation of wood in an unsustainable way, to tobacco or alcohol or any other type of drug, nor to pornography or similar degrading activities. Civic Banking was born to help the real economy and society to be better and more respectful with our environment, all with the aim of putting people at the center as the main objective of the economy and not the other way around .
Examples of Civic Banking
Muhammad Yunus is a person who founded the Grameen Bank in Bangladesh in 1976, a bank destined for the poor with which he introduced the Civic Banking there and he did it through his already famous microloans with which they tried to alleviate the famine of 1974 by giving him the opportunity to people to start over with a small business or with whatever it is that allows them to generate resources for their subsistence. Such was his success of the initiative that he was named Nobel Peace Prize in 2006 “for his efforts to create economic and social development from below”.
Another example of Banca Cívica is Triodos : a bank with more than 35 years of experience whose objective is to allocate its resources to finance the welfare of people and the environment . They are very transparent in the information on where their loans are destined and their fundamental objective is to help transform society using money correctly to promote a positive social change by financing organizations and companies of the real economy that, with their activity, contribute an added value to society and the environment.
To finish from CROWDLENDING.ES we invite you to subscribe to our website in order to receive our Newsletters with which we will inform you about everything related to the world of Crowdlending, investments and finances and, starting this month November, we will also send them to your email CRIC (Book of Investment Recommendations in Crowdlending) which is a document prepared by us with which we will teach you how and in what to invest, as an example, in order to show how you can get a good return on your savings through some good investments in Crowdlending.
However, there is a huge amount of loan offers today, how can you find the credit you need? The only way to make this choice effectively is to spend time studying the offers in the market. Only then can you find the loan that meets all the conditions you need at the right time.
Normal conditions of the loans
When you apply for long-term loans, it is common for you to be asked for a guarantee to guarantee the payment of the loan. It is usually a relative who signs to be responsible for the loan in case you could not in the future for whatever reason. The entities require an endorsement so that the risk of granting the loan is lower. On the other hand, if what you need is a small loan in the short term, you will not need to be endorsed by another person; the guarantees are necessary for mortgage loans. To this day, there are many loans available for which no guarantee is needed.
Also, when you ask for a loan you will be offered to take out insurance. You must bear in mind that this product was not originally within your forecasts. Some entities only seek to offer another of their products, you can choose not to hire this insurance. In other entities, you will not have to decide on this matter but it is usual to mention something about it. This insurance adds a price that you will have to face yourself and although it brings certain advantages you may not find it interesting. You must study the conditions of this product before accepting it and proceeding to formalize the application.
Make the necessary comparisons
Conducting comparisons between available personal loan offers is the best investment you can make with your time. You can use an online loan comparison to streamline this process. So you can see the characteristics of various financial products in a matter of minutes. These tools are easily found on the Internet and services to help you choose the loan you are going to hire. Often, the details that come in small print in the contract are the most relevant to determine if you can repay the loan within the established time frame.
In conclusion, dedicating time to choosing the loan you need is the best alternative to benefit. Remember that the idea is to improve or stabilize your economic situation through financing. You must avoid at all costs making irresponsible use of the money you have. In addition, asking for credits to pay outstanding debts usually does not have good results, since you will continue to carry a debt. It is better to wait until you have no defaults before requesting one of these financial services.
Other considerations in personal loans
Personal loans are marketed as a general rule with different denominations such as vehicle loans, credit studies, wedding financing, home loans, etc. With the exception of small specific differences, all are almost exactly the same financial product and all are personal loans.
As a general rule, the bank in which you ask for a personal loan will ask about the purpose of the money, although there are exceptions such as pre-granted loans, to avoid incongruities such as requesting thirty euros to finance the acquisition of a refrigerator. Always and at all times there must be a relationship between the money that is requested and the destination of it.
Virtually all financial institutions now leave to request personal loans online comfortably from home and without having to go to a bank office. Apart from the convenience of doing it from home, the answer is usually urgent, although depending on the bank the concession can be delayed if documentation is required.
The benefits of payday loans go from comfort, while they tend to have better costs, there are usually no commissions and there are no great requirements for linking- Purple lends and consolidates payday loans. An essential advantage is that the fact of making an online request for a loan or requesting an investigation does not imply the obligation to contract and, as a result, multiple requests can be made in different banks and we can choose the most convenient one for whatever reason. Speed, the genre of interest, demanded documentation or any other question can decant the balance to formalize with a bank or another after making different requests.