• Jedi Paul

  Economics Editor

Businessmen who borrow money frommobilize‘It is much more expensive this year. This is evidenced by a tour of the largest crowdfunding platforms. Through these types of services, entrepreneurs can borrow money from individuals instead of, for example, a bank.

Crowdfunding can be an interesting option for startups or companies that see a bank as too risky. Date importer Yogi and Yusuf from Hempstead is such a company.

“As a young company I didn’t have one yet Record. What’s more, the bank doesn’t really know how to estimate dates from Saudi Arabia, says bank founder Joachim “Yogi” Gehenyau. The bank wanted his house as collateral. “I didn’t feel like doing it. So I funded all my growth steps through crowdfunding.”

In 2021, for example, it raised €1 million from more than 500 home and garden investors. Geheniau paid 5 percent interest on the euros lent. It gave him the opportunity to expand the scope of importing dates. “Every year we need more stock. We now bring nearly 750,000 kilograms of dates here annually.”

Jehinyo now also wants to produce date powder as an alternative to sugar. And so the businessman approached the audience again. What it costs now: 9 percent interest.

“So my return is lower,” Jihinyao says. “In the coming years I may have to go on holiday to the Netherlands.”

Other entrepreneurs are also noticing that raising money via crowdfunding platforms has become more expensive. On Collin Crowdfund, the largest platform in the Netherlands, the average interest rate rose from 6.6 percent in October 2021 to 8.6 percent in October this year. At rival Sustainable Investment Company, the interest rate rose from 4.7 to 8.3.

“I compete with savings rates,” Jehinio says. It is also noted that finding investors takes longer. “Two years ago, this million was filled within half an hour. Now it takes a few weeks to raise 1.3 million.”

He points out that small investors have more alternatives. Supported by interest rate increases by the central bank, interest rates on savings accounts are also rising. Nowadays, savers can easily get 2.5% interest on savings. While the time of no interest rates or even negative interest rates is still fresh in our minds.

“Interest rates have simply gone up,” says Jeroen ter Hoorn, director of Collin Crowdfund. “The investor expects more interest, because the alternatives also generate more interest.” However, he does not see interest in crowdfunding decreasing among investors. “We grew again by 40 percent last year.”

Although raising money has become more expensive, Ter Hoorn has not noticed any additional caution among entrepreneurs. “It’s funny that we often anger entrepreneurs. They want to collect investment so badly that they propose, for example, 9 percent interest. Then we say: With 8 percent, you will also attract investors.”

With stricter rules at banks, raising money through crowdfunding remains an attractive option for some entrepreneurs. “Banks don’t want to finance fast-growing companies that are active in other parts of the world,” says Florian van Bemelen, based on his own experiences. Through his company Resonandina, he rents expensive medical equipment to hospitals in South America and the Caribbean.

In June, the company raised half a million dollars at 8% interest, and last month Resonandina actually paid 10% to raise growth funds. “It’s getting more expensive,” he admits, but he doesn’t plan to stop anytime soon. “If we have to raise money in Latin America, we pay 25% interest. So 10% via crowdfunding in the Netherlands is not too bad.”