Last Thursday , May 7 was held at the Chamber of Commerce of Valencia an event on financing alternatives for the growth of SMEs . It involved two companies dedicated to provide financing to SMEs through crowlending like Circulantis and LoanBook addition the company also participated Kantox, a platform for foreign exchange.
The event started from the hand of Raul Martin Calvo , Director General of Economics, Entrepreneurship and Cooperatives of the Valencian and deputy director of IVACE (Instituto Valenciano Business Competitiveness).
Raul Martin, told us about how the Government acts in boosting entrepreneurs, what methods have to finance … told us that Valencia has received the award from Enterprising European Region in 2015, among other topics ..
The landscape that entrepreneurs face today is ideal , as we said Raul Martin, because the environment is the perfect place to start a business, also from the Generalitat Valenciana, and Comuniddagozan a reference environment, and all actors who are supporting the world of entrepreneurship work together, both private and public part. With the work of all, it is getting an option to undertake very SHELF.
The mechanisms that the Generalitat Valenciana for the promotion of entrepreneurs is funding , IVACE has available 24 million € for funding, from what part of microcredit, innovative entrepreneurship or start-up or already established SME.
As for aid to entrepreneurs that there are today available, said Raul Martin Calvo:
There is a very good system, supported by the private sector and have the best time to start a business and the best time to get funding non – traditional funding as well. Finally seems to be moving all that are alternatives to bank financing, many investors willing to put money, but now the challenge is to find such projects and make these projects attractive for investors and through IVACE funding can support such investors or that such companies are launching their business.
The objectives in helping entrepreneurs who have IVACE (Valencian Institute of Business Competitiveness), are:
Capital increased risk companies or business angel may be due to the banking crisis, but another root cause is that e l investors are realizing they have to put their money to fund successful projects . In addition, investors are looking for that level of involvement with innovative projects in Spain.
The Valencia has been awarded in 2015 Enterprising European Region , there have been 12 regions in Europe that hold the award of the 270 regions eligible for this award only. Raul Martin tells us that this award has meant an important funding policy entrepreneurs momentum takes place in Valencia , and may be more like what is the participation of public and private actors.
Finally Raul Martin gives a number of tips for entrepreneurs :
The first thing is to believe in your project. If you believe in your project, the project will end. Nor should we obcecarse with an idea, that is, we are in a very good moment and there is much talk of funding, but it is more important that the project is well defined, and in this case we must seize every different level mechanisms business development or to plan your business and where you want to go. (…) Decide right focus and know where in addition to being humble at one point, to go and change your structure.
LoanBook crowlending is a platform dedicated to financing SMEs through various mechanisms. Eloi Noya, director of credit and risk the company takes us a little further into the world of crowlengding.
The mechanisms have a company to be financed through a company crowlending are l ines credit 1 year, by which enables the company to make arrangements 30 and 90 CIAS loans to a maximum of 2 years and forfeiting .
Eloi Noya explains what the crowlending
The crowfunding concept meets all activities where there múltioles investors who are supporting a project, a project can be more sponsorship or cultural or can be a project in which the investor requires a return. in requiring equity returns also we have the crowfunding it is to invest in a company, usually in the beginning, but enter as a shareholder in its capital, therefore at the risk of losing everything if the company is not viable. And finally we have the crowlending , where LoanBook stands, which is many investors are lending money to creditworthy businesses and what they expect these investors is a return, which will return capital plus interest .
As for the most significant differences between other financing alternatives, such as venture capital companies or business angel, Eloi told us the following:
The venture capital or business angel is a capital funding, therefore the company venture capital or business angel among as capital and are recommended for companies with high growth and still at early stages in a business project , the crowlending would be financing facility both current and long – term, but as for more mature projects. projects normally found in crowlending platforms are companies with a minimum of 3 years old.
The process to be followed by an SME to get funding from businesses much more agile and faster than bank financing . Companies must submit a financial documentation, and within 48 hours you an answer on whether you can access the company to finance and given a range of interest depending on the rating that LoanBook calculated. From this moment, the project enters the platform and investors conduct an auction. The period ranges from a few days up to three weeks depending on how attractive is the project and the risk you may have.
The crowlending introduces an innovation and several advantages over bank financing , Eloi Noya points out the three main advantages: speed of the process, transparency as are investors who decides the type and there is no cross-selling.
Eloi Noya finally leaves an advice to SMEs:
It is highly advisable to diversify sources of funding. So far, the only form of financing had was the bank financing and diversifying in several banks and we know that banks are sometimes a little erratic in terms of commercial credit policies, sometimes rates fall, sometimes the rise, sometimes give credit and often cut it . Therefore it is very advisable to diversify into other non – bank financing sources and crowlending are here for this.
Guillermo Gonzalez, CEO of Circulantis, a Valencian company dedicated to crowlending, also attended the event and explains what the crowlending
What do crowlending platforms is to contact small and medium – sized enterprises and self – employed with a community of investors . SMEs receive funding from a group of investors, that is, no one person or one institution to cover operations, but it is made collaboratively among many investors. The main advantage is that it is an alternative funding.
The main advantage an investor to participate in a platform crowlending is access and that you are accessing an asset, in this case the purchase of commercial credits, which today is exclusive to financial institutions and banks. Through crowlending markets itself you can access this type of investment, invest directly in SMEs with guarantees of those receivables from creditworthy companies.
According to Guillermo says, the average return that an investor could get right now is in the range of 7.5 to 8.5% . Each investor risk – based, bid interest or another. Is the investor who decides the interest rate depending on the risk you want to support . The medium term that usually have these operations is 24 hours, if the operation is larger may take a little longer.
The advantages for an SME or self-employed is that it is not necessary that the employer provide additional collateral due to the quality of issuers of promissory notes, and also does not detract financiaciación capacity.
In response to the question of why they have increased the number of alternative financing company , Guillermo says the following:
The main reason is that there is a need, there has been a very strong banking concentration in Spain and although banks are putting their sights on individuals and SMEs, again. But there remains a need for funding, there is a change of cycle and has been a very strong concentration process, there are fewer doors to the touch. So I think we have a good opportunity to provide other means or financing alternatives in other countries are used very naturally and in Spain are given the opportunity to grow these platforms.
Guillermo Gonzalez gives us advice for SMEs: to try it and compare, you lose your fear and use this form of financing.
Kantox born 4 years ago, working with SMEs and large corporations. Conditions and tools to work on extrerior SME trade had nothing to do with big business. Ernest Giralt tells us that:
We saw that because of being a brokered market, small and medium enterprises suffered high costs on the issue of foreign exchange and that is where is born a great opportunity and what is Kantox is created. Especially in the beginning to create a tool that fits the needs of these companies and allow some advantages in reducing costs and a significant level of efficiency issue.
What Kantox offers a market-place , where companies have direct access to the exchange rate mid-market. Companies when they go to a bank get a very different exchange rate because the actual fees charged. With Kantox, before closing the access operation can see the exchange rate.
Kantox is as simple as putting the amount of that $ 100,000 toward euros for the value date and pressing a button a button looks exactly the kind of change that is trading at the time (…) At the time that interests you, put your digital signature, presses a button, and the operation is closed. And then follows the banking circuit.
The most immediate benefit that can provide Kantox is a savings due to the exchange rate , there is an economic benefit, and also Kantox intended to be a tool that allows the company to monitor the operation, ie to inform the employer when seesaw substantially exchange rate. Being in touch with market volatility allows you to understand a little better the market and this is achieved more efficiently, because you know what the exchange rate and fees at the time and allows better organized and better understand what we are really doing .
Regarding that if a company can be more likely to increase if you work in several markets, Ernest Giralt tells us that a company that works with currencies is because they are present in international markets, and to be present in several markets may have greater stability, since the Spanish companies that have been in other markets have suffered less from the crisis. As for growth, being out of Spain allows further growth. Also has been able to grow in other In Spain there are good companies and be present outside during ciris has allowed them greater recognition and growth.
As for the companies that work with lesser known currencies , Ernesto told us the following:
We are seeing more companies are more internationalized, we see more and more companies in this time of crisis did not sell here and have had to go outside, and exports have grown. Most companies continue to be in the European Union and many levels of culture also usually Latinoamericana, imports and America and Asia. A level of exotic currencies, we work with the principal and whether we’re seeing in some industries, such as agriculture or engineering if they are going to Africa, countries where currencies are less liquid or more complicated.
Kantox received several awards at the time of start-up , for example the idea itself before the market, and once the project started, received awards from the banks. Kantox received the award for innovative company of the year by Banco Santander and Banco Sabadell and BBVA awards from también.Sobre banks, Ernest Giralt told us that over time we tend to compete with banks, but also to cooperate.