A relatively new but rapidly growing investment method in Lithuania through crowdfunding platforms is attracting increasing attention from investors. The "FinoMark" platform, which launched more than half a year ago, is steadily growing its base of companies seeking support and investors willing to finance their loans. According to platform representatives, a careful approach and continuous improvement of services to fully satisfy both sides of the clientele will lead to the growth of this new form of investment in the future. So what makes crowdfunding so attractive?

Investing in Business Becomes Accessible to Most

Previously, investing in business was associated with high-income individuals and thousand-euro investments, so the average person often set aside such ideas, leaving them to the "wealthy." Finally, this stereotype is fading, and crowdfunding introduces a new perspective – investing in business is becoming accessible to a larger part of society. For example, on "FinoMark," you can invest in a business loan starting from just 25 euros.

"Since the beginning of summer, when the platform became available to everyone who wanted to invest, we have attracted nearly one and a half thousand investors and, with their help, financed dozens of business loans worth over 500 thousand euros. The number of companies submitting financing requests is increasing, and our goal is to help them as efficiently as possible. Thus, we are also pleased that the supply of investment projects for our investors is growing," says Emilija Poškonienė, head of the business loans department at "FinoMark."

Crowdfunding platforms often attract investors who expect solid returns but are looking for short-term investments. For example, compared to peer-to-peer lending platforms, where loan terms are up to 120 months, "FinoMark" offers relatively short terms that do not exceed 36 months, with an average return of up to 10 percent.

The Variety of Investments Is Growing

So far, "FinoMark" investors have had the opportunity to invest in A-rated loans with an average interest rate of 9 percent and B-rated loans with 10 percent. However, to meet the needs of investors with a higher risk appetite, the platform has started posting C-rated projects with an average interest rate of 14 percent.

Although it is possible to invest in business loans from just a few dozen euros, many people who decide to invest prefer to allocate larger sums than when financing personal loans. Thus, another advantage of crowdfunding platforms is the ability to invest larger amounts of money. While peer-to-peer lending platforms in Lithuania limit the maximum amount to 500 euros per loan, "FinoMark" does not restrict its investors and allows them to invest as much as they want in a single project. Again, when allocating larger sums, it is understandable that investors want to provide more security and guarantees for their returns.

On crowdfunding platforms, even if you want to invest a large amount of money, it can be divided into parts and invested in different business loans – this way, the risk is diversified, and in the event of one borrower’s default, the invested amount in solvent borrowers' projects is not lost, and earnings are received from these borrowers. But this is just a natural feature of crowdfunding platforms. Additionally, they offer different packages of security measures, allowing investors to choose acceptable risks. "FinoMark" offers investors the option to choose projects secured by property complexes, real estate, or equipment, as well as guarantees from individuals or legal entities. By using such measures, investors significantly reduce the risk of losing part or all of their invested funds or not earning returns, thus confidently investing larger amounts.

Additional Benefits Await

Companies with loans sometimes find themselves in unpleasant situations where, due to the fault of other parties, such as an insolvent client, they cannot fulfill their financial obligations. In such cases, the company's credit history and reputation suffer, but it is also crucial that the investor who financed the loan is forced to wait for their return longer than expected or not receive it at all.

"FinoMark" representatives have previously mentioned that one of their distinguishing features is their highly attentive approach to both sides of their clientele. To facilitate debt collection processes and ensure the most efficient investing for financiers, they have started collaborating with the debt collection company "Legal Balance," which operates the platform Eskolos.lt. Companies can immediately recover the largest part of the debt by selling it to the Eskolos.lt platform and start fulfilling their obligations faster. This way, not only is the financial situation eased for them, but also for investors who receive their returns on time.

"As a crowdfunding platform, the smoothness of our processes and customer experiences depend on two components – investors and borrowers. If we cannot offer reliable investment products, we will not attract investors, and without them, borrowers will not receive financing. Thus, this partnership should speed up processes and ensure smooth cash flow on the platform," says the "FinoMark" representative.

According to E. Poškonienė, crowdfunding platforms are only now gradually establishing themselves in Lithuania, so there is still a lot to expect in terms of services that improve the investment experience in the future. Among them, "FinoMark" – in addition to improving platform convenience, plans additional benefits for investors – various offers, discounts on products or services from financed businesses, aimed at creating a stronger mutual connection between companies seeking financing and investors looking to efficiently employ their money.