What are social loans for companies? We associate loans with banks or companies specializing in them. But has it ever occurred to us to borrow money for our company from a stranger online? Sounds ridiculous? On the contrary!
What are social loans?
The idea of social loans is to bypass banks, credit unions and specialized companies. Individuals or companies can borrow among themselves, and everything happens on a special portal enabling the borrower to contact the investor.
Social loans involve the conclusion of an agreement between the parties in which they determine the amount borrowed, interest rate and repayment date. These transactions do not require bank intermediation. This web portal will enable you to find an investor in need of cash and a borrower with cash.
Community loans in Poland
Social loans appeared in Poland as early as 2008, but they are still new to most Poles. Although they promised to take our market by storm and dethronement the existing methods of borrowing money, they simply filled the niche. This is very good for us consumers: healthy business competition leads to attractive offers and beneficial solutions for clients. We have a lot to choose from!
Social loans for companies?
First of all, we need a social networking site that serves not only private individuals but also companies. Finding it will not be difficult, but let’s take a moment to check the reviews and read the regulations of the platform – choose a place on the network that will be the most friendly for us!
Then we register as a new user – in the case of borrowing for business purposes, we provide our company data and verify our bank account on the website. It is necessary to be able to use the portal.
When we have the first steps behind us, we issue an auction, i.e. we announce how much money we want to borrow from a willing investor. We can apply for both low and high amounts – it all depends on our needs. Once an entrepreneur who is willing to lend us money is found, we agree and sign a contract with him. Then we accept the transfer from him.
For what purpose can you take out a loan?
A social loan for companies can be used for absolutely any purpose. As responsible entrepreneurs, we will not be indebted to replace the Ford Focus 2004 with a new Porsche 911, but a loan for the renovation of a store, purchase of an additional delivery vehicle or equipment that is supposed to improve or even develop our company is most justified. Social loans are also sometimes used to start a new business.
The biggest advantage of social loans is the ability to negotiate their terms. The lender and borrower decide themselves how their contract will sound, at what time and with what percentage the money is to be returned to the investor etc. If any of the parties do not like the conditions, they can go without regrets and look for other partners, without carrying out a number of formalities.
To negotiate the terms of the loan, we will definitely need interpersonal skills, good arguments, and good repute. We should remember that when applying for a loan for a company, we will probably be checked by a potential investor. If it finds out that we are notorious debtors or opinions about our business cast a shadow of suspicion of unfair practices, the lender will almost certainly withdraw from the transaction. This does not mean that we have no chance for a loan if we want to pay invoices with it, because we should have had a leg lately. Business mistakes happen to everyone. However, we must not pack in so-called a spiral of debts, i.e. continuous borrowing to repay loans and other outstanding liabilities.
Not only for borrowers
Social loan portals exist not only for borrowers but also for lenders – investors. If we are in a good financial situation and we can make some of our funds available to someone under a loan, it is enough to register in one of the designated places on the network. Playing the cards (here: money) will earn you a few pennies: if we get along with the borrower, we’ll multiply our capital after paying off the debt.
Are social loans usury?
Usury, which is granting loans at a disproportionately high percentage, is illegal in Poland. This is considered to benefit from the poor financial position of the other person, which is prohibited by our law. So are social loans usury? Absolutely not.
Let’s start with the fact that social loan portals are designed to ensure transaction security. This means that if we notice that one of the investors offers loans at an absurd percentage, we can use the rating system – opinions can be issued to both the investor and the borrower. You should pay attention to them because these are the first signals we can receive about a potential partner for talks. If other users warn us against someone, let’s not risk it.