The principle of lending money has existed for centuries but was reserved to financial institutions. However, with the end of the banking monopoly in the 2010s, new players entered into the equation to make it possible for individuals to lend to companies. One of these actors is October, born in 2015 with the intention to change how European companies get financed.
If you are still wondering how lending platforms work and what October can offer you, have a look at this article.
What is October?
October is a a European Fintech with the mission to finance businesses better. Our technology makes it simple and fast to say yes to more businesses requesting funding. As a lending platform, we connect companies, that need a loan to carry out a project, and lenders, that want to boost their savings and support the growth of the European SMEs.
October operates on a European level, with teams based in France, Spain, Italy, The Netherlands and Germany. Companies from those countries can request a loan on our platform and can be financed by more than 30,000 private and institutional lenders from all over the world.
So far, 2,100 projects have been supported by our lenders community for a total amount of €700M. These loans can be rated between A+ to C- depending on the risk profile of the project, offer interest rates from 2% to 9.9% and have an average maturity of 4 years. Check our statistics here.
An unique hybrid investment model
On the October platform, there are 2 types of lenders that invest in the different projects published:
- Private lenders: individuals that lend directly through their desktop or smartphone. Private lenders choose the projects they are interested in and lend from €20. They can build a diversified portfolio by lending to projects from different sectors, countries, rating… while boosting their savings and supporting local businesses.
- Institutional lenders: the Public and Private institutional investors that take part of the funds managed by October. The October fund lends to almost all the projects on October. Institutional investors lend mostly for the same reasons as individuals do but they do not choose the projects or the amount, it’s an automatic allocation.
Thanks to this hybrid investment model, all the projects published on October have been financed. Know more about this unique model.
What are the steps to start lending on October?
The process to start lending to projects is quite simple and quick.
To start, you need to register on October and complete a form with your personal information. The Lenders Relations team will then have to verify your identity to make sure that you are the one using the platform. To do so, it’s really easy: you only need to upload two identity documents and a bank statements at your name. Through this identity checks, we aim to build a trusted relationship with you and prevent any illegal activity on the platform. Get to know our validation process.
Once you complete that part, you will have to take a short test to assess your investment knowledge before starting operating on October.
Start creating your ideal portfolio
The first step to start supporting European companies is to input money to your newly verified October account. Then, you will choose and finance the projects of your interest from €20 in just a few clicks.
But… what are the benefits of lending to companies on October?
- Diversify your portfolio: Holding a diverse portfolio of financial products allows the yield of your portfolio to be more stable but diversity is also good within the same category of assets. On October you can choose to finance SME projects diversifying by sector, country, credit score, interest rates, maturity and guarantee. As a result, the impact on the return in the event of a default is smaller and the loss of capital is less significant. If you are interested in learning more about how to build a diversified portfolio, consult our tutorial on that subject.
- Get earnings from your savings: many lenders move towards lending platforms because of the higher yield it offers when compared to classic bank savings. For every project you support, you will receive your repayments (capital and interest) on a regular basis, depending on the amortisation schedule of your different loans.
- Supporting companies: what makes this format unique is the ability to make a return on your savings, while supporting the real economy at the same time. Your investment will have a direct impact in a company growth.
Need more time to think about it? Take a look to our tutorials to have a complete overview of October or reach out through the chat of our website to ask us your questions. The Lenders Relations team will be happy to help you!