Investing in small businesses: How to achieve profitability by helping SMEs grow

Let’s start with a point known by all: we live in a world dominated by large multinational corporations, with names that echo across countries. This leads us to often overlook the great potential hidden in small and medium-sized enterprises, also known as SMEs.

However, it’s important to highlight that they are not only the engine of the Spanish economy but also have the potential to offer a unique investment opportunity. What characterizes this? It’s profitable and aligned with values like the real economy and local development.

Given their potential, let’s dive deeper into their possibilities, explaining how you can invest in SMEs and the tools available to help you obtain profitability. All this while helping businesses that truly need to grow.

Why invest in small businesses?

There’s a clear reality: SMEs are not usually the main focus of large investment funds. However, this, far from being a disadvantage, opens the door to great opportunities that traditional investors often overlook. Some examples include:

• Proximity - Often, we find businesses with a direct impact on your local environment.


• Growth potential - If invested in their early stages, a well-managed SME can grow faster than a large, established company.


• Diversification - Including SMEs in your portfolio allows you to reduce exposure to traditional financial markets.

On the other hand, in times of economic uncertainty, many investors value more than ever investing in sustainable, productive, and even socially useful models. Therefore, supporting the growth of an SME is betting on the real economy.

How can you invest in SMEs?

Here we must clarify that, although not all small businesses are publicly traded, there are mechanisms allowing anyone to participate in their financing and obtain returns. These are some of the available options:

Crowdfunding

This option consists of investing in the capital of a company in exchange for shares. This model is more long-term oriented and involves taking on the risk of business growth.

Crowdlending

This alternative is less risky for many profiles. What’s its advantage? It allows you to lend money to companies in exchange for an agreed-upon interest rate. At Inversa, for example, we make it easy for investors to participate in:

• Invoice advances


• Promissory note discounts


• Factoring with or without recourse

Crowdlending is a type of investment with a more conservative approach, with short maturities and the possibility of diversification by company, sector, or type of operation.

What profitability can you obtain?

Profitability depends on the type of operation and the associated risk. In the case of business crowdlending, returns usually range between 5% and 9% annually, depending on factors like the company’s solvency or the operation's term.

At Inversa, these opportunities are published with full transparency. At all times, you have information on which company you’re financing, what the company is using the invested capital for, the maturity period, and, of course, what return is being offered.

On the other hand, at Inversa, we differentiate ourselves because at all times, you choose the operations you want to participate in and the amount. You don’t delegate your decisions to anyone; you have full control at all times.

What risks exist when investing in SMEs?

While investing in small businesses can be highly profitable, we must not overlook its positive aspects. It’s important to be aware of the risks involved:

• Risk of non-payment - Especially when it comes to loans. With this in mind, it’s important to have platforms that analyze the risk and publish operations with guarantees.


• Lack of liquidity - Often, these are fixed-maturity investments. You cannot easily sell them on a secondary market.


• Limited information - In some cases, and unlike what happens with large listed companies, SMEs are not required to publish all their financial information.

At Inversa, we mitigate these risks with a policy of prior analysis, risk management, and rigorous selection of operations. Additionally, we work with real and established companies, which guarantees an extra layer of security as well as risk control.

What type of investor can benefit from these investments?

The best part about investing in SMEs or small businesses is, precisely, that they are accessible to all types of investors. Anyone who wants to can invest to benefit from aspects like:

• Make your savings profitable with a realistic and cautious approach


• Diversify your portfolio outside the traditional financial system


• Contribute to the growth of small businesses with economic impact


• Actively participate in the investment process

In addition to this, it’s important to highlight that investments can be made with low amounts. At Inversa, you can start investing from very accessible amounts, without needing a large fortune.

Do you want to invest in small businesses?

Investing in SMEs is not just about profitability, it’s also a way to make a real impact, to make your savings contribute to generating value in the local economy. When you finance an operation at Inversa, you are supporting businesses that need liquidity to continue growing, paying salaries, or investing in their activity. And the best part is that your investment will be fully transparent, autonomous, and free from unnecessary complications.

At Inversa, we provide you with direct access to filtered opportunities, explained clearly, and with full control in your hands. You choose the company, the amount, the term, and the type of operation. We handle the analysis and technology to make investing in SMEs easy, secure, and profitable.