Participatory lending: boosting solvency without raising capital
The prolongation of the pandemic has led to the over-indebtedness of viable companies. It is therefore necessary for SMEs to recover their solvency in order to be able to continue investing, innovating and generating employment. To achieve this, there are financial formulas that allow companies to attract investors without the need for them to become shareholders, for which the SME must have a positive credit rating, including equity loans.
This is an intermediate financing instrument between equity and long-term loans, generally used in times of crisis, in which financiers receive, in addition to the fixed remuneration in the form of interest (3.5%), a variable remuneration based on profits, usually around 3-8%. Public institutions are already using these resources to revitalise the economy.
The following table summarises the main characteristics of equity loans and compares them with other financing instruments: