On December 17th, 2019, Altfinator organised a 1-hour webinar on debt crowdfunding, which main objective was to spread more awareness and stimulate finance instruments (other than a bank) among SMEs, through different perspectives and experiences through crowd-lending providers and innovative SMEs. Some of the subjects addressed in the webinar were what the benefits are for SMEs, which risks exist and how to mitigate them.
Agenda of the webinar
Three speakers were invited to present at the webinar, who were representing their own companies and how they function, as well as what they can offer to consumers.
  • ECROWD! is a crowdlending platform that was founded in 2014 in Barcelona, Spain. This company was represented by Matthieu van Haperen and Jordi Solé Muntada, who explained what crowdlending was, how it works, the benefits to consumers and successful projects (for example Synergym).
  • Synergym is a Spanish low-cost high-value fitness chain established in September 2013. in Malaga, Spain. Founders of this fitness chain are Len Lvovich and Dr. Sergey Miteyko. Today Synergym is the #1 low-cost fitness chain in Southern Spain and the top 5 player in Iberia, with 24 clubs launched this year, and 26 more on the way in 2020. Len Lvovich was a guest on this webinar, he represented his company and later on discussed the company’s plans and how they used crowdlending.
Each party presented their experiences for 15 minutes. At the end of the webinar, there was time available for questions and answers.
Main topics discussed:
Matthieu van Haperen:
  • What are the benefits for SMEs of this type of finance;
  • What might be the risks;
  • How they are mitigated;
  • How it works in practice;
Len Lvovich:
  • How and why they decided to use this financing instrument.
  • How did they get to succeed in the finance raising campaign.
  • What should be considered by other SMEs when raising this type of finance.
Main conclusions:
The difference between traditional financing and crowdlending is that in traditional financing we have financial institutions, banks, funds, between investors and legal entities. This way, they can control to whom they can lend money and for what price. On the other side, crowdlending is a more direct way of financing. With crowdlending, investors can directly invest in companies. The platform will receive requests by the companies, analyse ideas of the company and if the platform considers requests eligible, it will place the request on their website to be available for potential investors.
How long it takes to receive financing? There are typical stages that need to be carried out for a loan. The first stage is the “signing of intention contract”, where after this the platform will require financial information and internal validation (1-2 weeks). The next stage is the funding period (80.000/100.000 Eur/week) and finally when there is 60%-70% confidence that the project will be financed it will proceed to an external validation (1-2 weeks) and afterward the signing of the loan agreement. The length of financing depends on the number of sources.
To utilise crowdlending, you need to have an interesting project, a story behind it and to be specific about what the funds will be used for. You should find crowd-lenders which profiles and focus match with your objectives. Some actions that can accelerate the process are to prepare financial packs sometime in advance, being flexible and secure SGR backing.
The abilities that define crowdlending are speed, flexibility, and timing. Crowd-lenders are very quick in responding. Banks can be also quick but requires several years to build that relationship. Also, you can have more flexibility around amounts, terms and grace periods. What is the most important aspect of crowdfunding is that can be helpful between Seed and Scaling-up phases when traditional funding is not available.
66 participants across Europe were registered for this webinar of which 31 took part. At the end of the webinar, every participant received a questionnaire to be filled in, voluntarily. 10 participants answered the questionnaire which makes it 32,26% of total attendance.
Before the webinar, 10% of all participants admitted having poor knowledge, 20% modest, 40% sufficient and 30% good. No one had admitted having excellent knowledge. A good sign of this webinar is that all participants have gained knowledge so that 10% answered they got excellent knowledge afterward, 40% good and 50% sufficient. Among replying SMEs, three had not considered using alternative financing (AF) before attending the webinar, only one SME had considered using AF, but had not yet tried.
75% of all participants answered “yes” to the question “would you consider advising the use of AF to your associated or supported SMEs”, while 25% were already previous or existing customers.
80% of the participants considered the length of the webinar as appropriate, while 50% thought that the information presented was applicable for the companies and that the level of detail was appropriate.
On the last question “Would you like to receive news by ALTFINATOR project” all participants answered with “yes”.
Watch the recording of the webinar HERE