Being a bank in Spain is not easy. Not only do you have to meet a large number of administrative requirements, but, economically, to start your activity you have to deposit 18 million euros in cash. Something that takes away the possibility of benefiting from the profitability of being a bank to individuals, especially their most typical business, lending money to companies and families. Until now. Thanks to companies, you can lend as if it were a bank.
How banks analyze loans
First, it is important that you know what banks rely on to lend money to individuals and businesses:
Bank history, studying both the payments made by the credit applicant and their income. This is based primarily on the movements that the client has in the lender itself. Therefore, it is usually more complicated to ask for a loan when you are a new client than when you have been in a financial institution for many years.
Summary of income: The most normal way of knowing them is by submitting the income statement (IRPF). This can generate a problem when analyzing this income since this statement can have a very important time lag. For example, an application in the first months of 2018 will be based on the income statement of the year 2016. In the case of the self-employed worker, the tax data is more up-to-date, since they can be verified in the quarterly tax returns such as declarations VAT or payments on account of personal income tax.
Debt statement: Your debt status is public. Whether you are a guarantor or if you have debts with a financial entity, you are registered.
Guarantees: If the income is not sufficient they can request guarantees as properties that will have to be justified with registration notes or deeds. The credit institution will analyze if they have any debt or charges. Other assets or even the possibility of having a guarantor will also be taken into account.
Purpose: Only in some cases it is requested that the final object of the loan be justified, especially if it entails some different conditions. But even in these cases the documentation to be provided as budgets or proforma invoices is not very extensive.
All these data give rise to the credit score, which evaluates the viability of the credit through a score that determines whether the loan will be approved or not, a way of valuing loans that differs from how a Fintech performs it.
How is different and how can you lend as if you were a bank
Faced with this rigid system, though you can not only lend as if you were a bank you will also benefit from a different way of considering the projects. Of course, the mentioned variables are taken into account: income, indebtedness, guarantees…. But it is done differently.
The importance of the destiny of the project: The nature and the specialization of itself lead to the fact that this point or not taken into account in traditional loans now occupies a relevant point. All this has led to, for example, many entrepreneurs and startup projects prefer platforms.
Personalized risk analysis: The investor does not need to have extensive knowledge of financial and accounting concepts. It is the platform that analyzes and assesses the risk of the investor so that he has a clear knowledge of where he invests and can diversify between different purposes or projects.
Low minimum investments: With the knowledge of where it is invested and the evaluation, we can already invest as if we were a bank, but with a big difference, the accessibility of being able to do it with small amounts.
Flexible investment model: We can not only invest with small amounts, but we also do it flexibly, making contributions whenever we want, but we also do not need to deposit all our money at the beginning.
Control of results: And, of course, with full knowledge of the financial result, of the collections, of the overall profitability of our investment…. All at the service of the investor.
The Artful Dodger you can see and compare the best investment options for individuals so that without being a bank, you can lend money as if you were.