Raise loans from a broad network of private and corporate investors

What to expect from crowdlending?

Crowdlending is an alternative form of financing where absolutely anyone can invest in your company. It is an interesting structure that allows various investors to lend you small amounts.

Specifically, you determine a target amount, the loan period and the interest rate. Then you raise money in your network. This is often with family and friends, but sometimes also with people from your business network, customers and suppliers. And if you give enough publicity to your crowdlending campaign, you can also convince people outside your network.

In a crowdlending campaign, it is best to work with a licensed crowdlending platform that is supervised by the FSMA. Some FSMA licensed platforms in Belgium for entrepreneurs include:

• WinWinner
• Look & Fin
• LITA.co

What are the benefits?

With a crowdloan, you can borrow from a large audience and it is also suitable for any company, because everyone has a network that they can use. By putting together many smaller loans, you can still raise several hundred thousand euros in financing quite quickly.

Even if you have a limited network of your own, it is still an interesting option because, with a good file, you can also call on the community of the crowdlending platform. For example, crowdlending is not only a financing campaign, but also a marketing campaign.

Both non-profit organizations and SMEs of all sizes can raise money via crowdlending. You can start a campaign for as little as €25,000 and you don't have to provide any guarantees.

Since crowdlending often works with subordinated loans, it can also be interesting as a lever for a bank loan. This is because such a loan is seen as almost personal input.

In certain cases (e.g. win-win loans), it can also be a very interesting investment for investors because they can enjoy various tax benefits such as a tax credit and government guarantees.

What are the disadvantages?

Of course, all that extra publicity around your funding is not interesting for everyone, because the entire campaign is made public. This way, the general public knows immediately how much you're raising and at what rates.

You will also have to invest a lot of time and energy to, among other things, access your own network. Moreover, it is not a cheap form of financing because, in addition to the interest, you also have to pay the crowdlending platform for their services.

Finally, you need a company with sufficient repayment capacity. Those who are still playing with an idea and have limited turnover can therefore not make use of a crowdlending campaign.

What are the challenges with crowdlending?

A crowdlending campaign takes a lot of time and energy, but there is no guarantee of success. Just like bank financing, the crowdlending platform will do a thorough screening of your business and cash flow plan. A large part of the files are even refused on these platforms.

The good news is that once you are inside, the chances of success are quite high. At Winwinner, for example, more than 9 out of 10 companies find their target amount within an average of 1 month.

Why seek crowdlending via The Harbour?

The Harbour has strong relationships with crowdlending platforms in Belgium. We know the admission criteria and fees for each platform. This way, we can easily choose the most suitable platform for you and prepare a strongly substantiated file. No valuable time is lost in launching your campaign to raise money as a lever for other funding.