Online lending platforms for businesses have announced a number of measures to help borrowers affected by the Covid-19 crisis, and make it easier for companies with cash-flow needs to obtain financing. Details.
Business in slow motion
Crowdfunding is a highly popular financing solution for business start-ups, takeovers and expansion. It is often used to complement other financing tools, such as honor loans, micro-credits or bank loans.
The participatory finance sector, or at least that of business loans, has not been spared by the Covid-19 crisis. Today, the activity of platforms is slowing down, as some project applications are subject to administrative constraints. This situation, if prolonged, could force start-ups and financially fragile companies out of business.
Temporary support measures
Two main support measures have been taken by lending platforms.
A freeze on loan repayments
To avoid a sharp rise in their default rates, most crowdlending sites have announced a freeze on loan repayments. This is notably the case for the October platform, which has a portfolio of 800 SMEs financed in France, Italy, Spain, the Netherlands and Germany, and has decided to suspend repayments due by these companies for 3 months.
Online equity pioneer Anaxago has also announced a 3-month postponement of repayments scheduled between March 15 and April 30, as well as a 3-month postponement of coupons "in connection with hotels, emergency accommodation and managed residences".
Tracking SMEs at risk
Some platforms, such as Lendopolis and Look&Fin, have opted to monitor companies in the most at-risk sectors and help them with the practicalities of qualifying for government aid. For its part, Tudigo, the leading participative financing platform for French VSEs and SMEs, is adapting its solution by offering these companies loans starting at 10,000 euros, compared with the usual 100,000 euros.
Crowdfunding: which sectors are weathering the crisis best?
While some sectors, such as catering and events, are experiencing a sharp decline, others are weathering the Covid-19 crisis better. These include digital, healthcare,food and renewable energies.
In all cases, companies need to prepare for the post-confinement period by participating in a different way in change and in the development of society. It promises to be a major turning point for these players.