Crowdfunding. What is it and when can we use it?
The aim of crowdfunding, also known as crowdlending, is to provide funds, whether in the form of a loan or capital, to SMEs and entrepreneurs in exchange for a return.
As an alternative to the most used source of funding, namely bank funding, crowdfunding platforms were launched as a different means of channeling saving towards investment. These platforms seek to act as a showcase for firms looking both for funding and for investment pursuing returns normally higher than those offered on the more conventional markets.
In short, crowdfunding is a means of financial disintermediation based on the new technologies.
We should stress that these platforms, regulated by Law 5/2015, must ensure their neutrality between the investor and the promoter, without engaging in financial consultancy services. The investor should always be aware that what is involved is an investment which, while potentially profitable, is highly risky. This is because the promoter may be unable to repay or remunerate the funds received, given that neither the platform nor any other party can guarantee – and this must be expressly clarified – its solvency and viability.