Lately, the pandemic’s negative economic aftermath of inflation has become increasingly relevant. For example, in December 2021, inflation in Latvia reached a record-high level of 7.9%. It is important that, under the circumstances when cash swiftly loses its value, it works, not sits in the deposit or savings account. Money can work proactively either by investing in companies (purchasing shares) or lending to the companies.
 
At the moment, it seems like the world’s and also the Baltics’ stock markets are at their historically highest value. It means that there is a significant risk that further share value growth will be slower or even that the share prices will be corrected. In this situation, issuing business loans is great money protection against inflation if the interest rate is higher than the forecasted inflation rate.

One of the easiest ways to issue and manage business loans is on the financing platform of Capitalia. Experienced in business financing since 2007, Capitalia offers investors the possibility to co-finance loans to Baltic companies, which use these funds to develop and grow their businesses. Co-financing concept means that all Capitalia-provided loans have at least 5% investments from Capitalia itself. This unique type of operation ensures that Capitalia and platform investors share the same interests. Capitalia also provides company analysis, payment control and, if needed, works with loan recovery.

Capitalia co-financing platform has financed more than 500 companies, and the historic average annual interest rate for investors is above 12% (including provisions for bad loans). Capitalia-offered loans to the companies often are used as an addition to bank financing to provide working capital, investments in machinery, or finance company buyouts. The average term for such loans is 12 months, but overall the available loan terms are from 2 to 36 months. Capitalia financing has been used by such companies as Pure Chocolate, Aerodium, Aerones, Gandrs, Peruza, Stenders, and many others. Most frequently investors are offered to lend to companies operating in agriculture, manufacturing and trade industries. On average, investors receive 3-5 new loan investment opportunities a week.

Loan financing through Capitalia platform allows the investor to gain passive income and easily create a diversified portfolio. Additionally, loan financing not only lets money earn, but also supports the Latvian economy, helping the local businesses. Registration in Capitalia investment platform is based on a detailed investor selection process to review the investors’ experience and investing goals, and their conformity to this financial instrument. After registration, the investor receives access to a detailed description and Capitalia analysts’ prepared analysis of each offered loan. Taking into account this information, the investor can apply to co-finance the particular business loan. The minimum investment amount in one loan is EUR 1,000. The investors are also offered to create a customized, automatic investment selection.
 
Investors can choose the loans based on wide risk, collateral, and term preferences. The full interest rate range is between 6% and 18% per annum. Loans with the lowest rate provide the highest investment security. For example, Capitalia offers to invest in loans with a European Investment Fund guarantee. In case such loan is late for more than 90 days, this loan is automatically repaid to the investor with the accrued interest. Capitalia provides regular updates and information about each financed loan.

Of course, loans to small and medium companies are exposed to risk. Even though losses from bad debts on Capitalia platform create only 0.07% of all issued loans, this statistic can significantly change with the economic situation. Therefore, the investors should be able to individually assess the risks of each loan and understand the business financial analysis. They should not take up risks that are not compatible with the investor’s financial situation and investment strategy.
 
With its long operational history, Capitalia is one of the first alternative financiers in the Baltics. In addition to loans, Capitalia offers businesses venture capital investments and consultations in business sale and financing attraction deals. To investors, Capitalia offers its research about Baltic bonds, investments in venture capital funds, and soon investment advisory services will also be provided.
 
The main reasons to start business co-financing on Capitalia platform:
●     Historic annual return above 12%;
●     Option to easily create a diversified loan portfolio;
●     Easy and convenient risk and investment preferences management;
●     Loans to recognizable Baltic companies with a great reputation;
●     Financing encourages additional support to the local businesses.
 
Additional information about investor services is available on the website https://www.capitalia.com/en/invest/cofinancing/ but registering as an investor is possible here https://www.capitalia.com/en/login.
 
Contacts: info@capitalia.com and +371 2880 0880.