

Two thirds of SMEs finance themselves through alternative sources and refrain from borrowing. This number seems very high at first glance, but given that 89.9% of companies are micro-enterprises with less than 10 MA (see last blog) not surprising. This is also reflected in the main reasons for a waiver of debt financing:
• You could find other financiers
• You have enough equity
• Demanded securities too high
But although many SMEs have a need for funding, they often do without it. The most important reasons why an SME does not apply for a loan, despite its financial need, are:
• The necessary collateral is not or not enough available
• The entire credit process is too tedious
• It is already assumed in advance that the loan will not be approved
• The personal effort and / or the high costs scare off a loan application
• There are cheaper / easier alternatives than applying for a loan from a bank
How can Crowdlending support SME financing?
The tedious credit process is streamlined, automated and digitally processed. This allows a faster review process and thus less potential for frustration if rejected. At Crowd4Cash, therefore, the basic questions are asked right at the beginning, if these can not be answered positively, the completion of the application is simply superfluous. Of course, a crowdlending platform will insist on collateral in case of doubt. But the flexibility to order collateral even for smaller amounts is certainly another plus for alternative financing. Especially for amounts below CHF 1 million, crowd lending financing is certainly a good alternative. More information can be found here.