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.