SME financing, unlike usual in the age of Corona
Since the start of the corona crisis, corporate lending cannot be separated from the consequences of that crisis, its impact on credit demand, and government measures to support the economy. Following the start of the corona crisis in the second quarter, lending to SMEs has declined compared to before the start of the corona crisis. The volume of new agreements decreased by about 15 percent. This was partly due to a reduced willingness to invest among companies and because banks have tightened their acceptance criteria.
How do you finance real estate if the bank says “no” to your financing request?
We’ve outlined the most common ways below:
Informal investor from your network
Frequently, an informal investor assumes the position of an individual or a group of individuals in your network. Since these lenders have different assessment criteria than banks, they are sometimes more positively disposed towards your issue than your bank. Often these loans have short-term maturity with a refinancing moment at the end of the term. On the other hand, loans through informal investors often have higher interest rates or heavy repayment pressure.
The drawback of informal investors is that you have to happen to have one in your network. If you don’t, it is tough to find an informal investor.
Crowdfunding
Crowdfunding isn’t a novel concept. Rather than one funder, you raise funding from multiple investors, many of whom can invest as little as $100 in your funding request. The upside of Crowdfunding is that your project is made very accessible to investors by different platforms, making raising funding a bit easier.
The disadvantage is that the interest and repayment burden often weighs heavily on your liquidity. Additionally, you have to be comfortable with the fact that all your details will be on the Internet. That is necessary to convince ‘the crowd’ to invest in your application! In this extensive article, you can read more about Crowdfunding.
The P2P platform of the Netherlands: Briqwise
Briqwise is one of the best-known platforms in the Netherlands. You can submit an application of this kind quickly and easily at Briqwise. So this means you can arrange real estate financing for your business without a bank. Real estate is the most important criterion here. Then you can expect an affordable interest rate starting at 4.5%. Thus, you can always repay penalty-free and have a limited repayment burden. In conclusion, it is also up to you what that repayment term may be.
In practice
Briqwise conducted interviews with several entrepreneurs who were unable to obtain financing through the traditional routes, but did obtain it through Briqwise:
Angelique explains: “With the help of a good advisor, everything was sorted out, and we succeeded in arranging the financing. Generally, the bank financed something like this using part of the equity capital. However, the bank was not prepared to finance the entire project in this instance. So, for that remaining part, we approached Briqwise. They examine and assess things differently, and in the end, it was a success!
“Many people have entrepreneurial ambitions, but often they don’t act on them,” Linda asks. “How is it possible that you are making those ambitions a reality?” Angelique: “I’m not afraid of a challenge, and neither is my husband; together, we’re going to take on this adventure. We want to have a very bright future and not think in retrospect: ‘If only we had done it then.”
As an entrepreneur, you would like to build a successful business as soon as possible, ideally with your commercial property. Or, as an (entrepreneurial) investor, you would like to buy a property to increase your return. Unfortunately, regularly, it is the bank that hits the brakes. Stricter regulations make financing (with real estate as collateral) with a bank complex, time-consuming, and often impossible. And if they do succeed, the repayment obligations are typically substantial, and penalty-free repayments are generally not possible.
Briqwise offers the solution with a platform that connects the ambitious entrepreneur and investor. With attractive conditions for both parties. The entrepreneur who arranges financing (with his real estate as collateral) via Briqwise has little or no need to make repayments, but he can do so at any time and it is always penalty-free.
- SME financing, unlike usual in the age of Corona
- How do you finance real estate if the bank says "no" to your financing request?
- Informal investor from your network
- Crowdfunding
- The P2P platform of the Netherlands: Briqwise
- In practice
