Fellow Finance ​News ​Archive

Experiences of business crowdlending by the eyes of investors

05.10.2017 12:25

It has been a year since we opened the business loans and invoice financing to the Finnish companies in our crowdlending platform. Now it is a good time to take a look back at the results and experiences we have had during the last year by the eyes of our investors.

During the year, we have received a total of 3 951 business loan applications of which 19% have eventually been approved and funded by our investors. The volume of business loans has already increased well over 100 loans a month, enabling our investors to have an optimal diversification in their investment portfolios. Investors are recommended to diversify their business loan investment portfolios in at least 100 different business loans to reduce the credit risk and to achieve the best return for their investment.

By the rapid growth of our business loan marketplace, we have expanded our business investment product category to include short-term invoice funding alongside the traditional long-term monthly installment business loan. Read the news about the launch of the invoice funding here.

Our investors have gained an average 9.1% annual return from business loans.
The average maturity of business loans has been 3 years.
The average maturity of invoice funding has been 26 days.

Fellow Finance business loans

Business loans are primarily monthly installment loans with a steady cash flow. This monthly cash flow can be reinvested in new business and peer-to-peer loans allowing investors to enjoy the compound interest phenomenon.

The repayment of business loans has been on a very good level. For the time being, only 2,6% of monthly repayable business loans have had over 30 days of payment delay on an installment. There have not been any credit losses. The credit risk of investor is significantly reduced by the entrepreneur's own personal guarantee and often a collateral such as real estate or enterprise mortgage in addition. The personal guarantee and the possible collateral will substantially improve the position of our investors if a company has financial difficulties in repaying the loan.

Fellow Finance invoice funding

Invoice funding is investing in short-term (14-90 days) trade receivables. The core idea of invoice funding is that a company gets funding against its invoiced receivables. In other words, invoice funding is a short-term business loan. The credit risk is not transferred to investors, but it is retained by the company that finances the bill. Investors have the credit risk towards the company that is financing the bill.

Invoice funding is a very interesting investment option due to the rapid turnover rate of invested capital. The average loan period of invoice funding has been only 26 days. Furthermore, the average interest rate of invoice funding has been over 7%. This is extremely good rate compared to any other short-term investment product.

Fellow Finance is the only crowdlending platform in the Europe where investors can diversify easily their investment portfolios to business loans and peer-to-peer loans by using the same platform. We are offering peer-to-peer loans in Finland, Germany and Poland and business loans in Finland.

Start widening your investment portfolio with profitable peer-to-peer loans and business loans today by signing up for our investor service.

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For more information on our service, please send email to customerservice@fellowfinance.fi

This is not, and should not be understood as an investment recommendation or an invitation to subscribe, buy or sell peer-to-peer or business loans. When investing in an investment, an investor will base his decision on his own assessment and take into account his / her own goals and financial situation. There are always risks to investing peer-to-peer and business loans. The value and yield of investments may change and the invested capital may be lost even in full. Historical development is not a guarantee of future returns.