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Crowdlending Engl

Crowdlending is an alternative form of financing, which ensures financing without the involvement of a bank. In its original form, a platform mediates a loan between the borrower and the lender without being a credit party. The parties are treated equally and the lender receives annuity payments (combination of repayments and interest) from the debtor via the crowdlending platform.

In Switzerland, the model that the platforms themselves act as lenders has prevailed. This has the advantage that the lenders who finance the loan have no license obligation (even if they do it commercially). The crowdlending platform also takes over the amount transformation function of the banks, since they bundle smaller amounts into one loan. As a rule, several lenders (the so-called Crowd) finance a loan, which is then paid out to the debtor. The platform acts as administrator and paying agent and receives a commission for this.

The model does not envisage a bank or conventional credit institution for the creation of the loan agreement. Since such conventional providers of loans mainly live from the interest rate differential business, i.e. refinance themselves cheaply and borrow more expensive money, the interest rates for both parties are usually relatively poor for such providers. Since the crowdlending business is only financed by platform fees, the terms in this form are more advantageous for both credit parties than with a conventional provider. In this model, the bank only has the role of the account-holding institution through which the cash flows are processed. Find out more in our Blog.