Autonomy in investment management and crowdfactoring

When we are children, what we envy most about the adult world is its autonomy. Ability we have to make free decisions about many aspects of our lives: Do I change jobs? Do I buy a house? Do I invest my savings? And, if I decide to do so, what should I invest them in? Alternative financing platforms give people full autonomy in investment management.

You have probably heard more than once that we live in the information age. The Internet, smart devices, marketplaces, web and mobile applications… All these technological advances have allowed us to leap in our ability to inform and communicate. But they have also positively impacted our ability to act, including in the field of investment management, freeing us from the constraints of time and space.

We can buy a television in an online store or contract electricity from an electric company's website, but we can also invest our money. And, in the case of crowdfactoring platforms, we have wide autonomy in managing investments.

What does this mean? We will answer it below.

1. Why does crowdfactoring give us autonomy in the management of investments?

In the classic investment products offered by traditional financial institutions, the investor contracts a certain product and decides how much money he is willing to invest. In doing so, he considers the profitability and the risk involved in the operation.

However, beyond this initial decision, individuals have autonomy in investment management. What is more, it is no longer that they cannot decide where their money goes, but that they are often completely unaware of it. They have to wait for their investment to yield the expected returns.

This is not how it works in the different types of alternative financing in general and in crowdfactoring in particular. Rather, the investor has at his fingertips all the information he wants to know about the multiple options on offer and, based on this, can decide autonomously which invoices to buy and from which company to buy them.

This paradigm shift is possible thanks to the following:

• Technological development. Marketplaces, Blockchain, Big Data, algorithms… All these cutting-edge developments allow FinTechs to launch innovative projects such as Inversa Invoice Market, which facilitate the buying and selling of invoices and offer credit information on transactions.
• The raison d'être of crowdfactoring. Crowdfactoring gives relevance to companies that put their uncollected invoices up for sale. Many of them are real economy businesses that need to obtain liquidity beyond the banking sector. Therefore, it is key that investors can get to know these business projects and the companies being sold. This is an important factor when choosing one or another invoice beyond the classic conditioning factors such as profitability or risk, which continue to be crucial in investment management.

2. The range of investment products on offer has increased

Only after the emergence and consolidation of alternative financing do investors have access to the investment products offered by traditional financial institutions. Moreover, these products are very similar and offer similar conditions.

In contrast, the various forms of alternative financing offer new products that can be successfully tailored to the needs and wishes of each investor.

Crowdlending, crowdfactoring, crowdequity… Each typology has its characteristics and entails different conditions and benefits for the investor and the company that obtains the financing it seeks.

Thus, the increase in investment products and the number of players offering them undoubtedly impact greater autonomy in investment management. Savers can choose the type of product they want and which financial sector player, both traditional and alternative, they want to trust.

3. All the information on investment products is at your fingertips

At this point in history, no one doubts a mantra that was as true in the Roman Empire as it is today: information is power. And, if we take it to our territory, information gives us autonomy in investment management. Why? If we don't have the data, we need to make decisions… But how are we going to make them successful? Are we going to be guided only by our intuition?

On crowdfactoring platforms such as Inversa, all the information about the invoices that are traded is available:

• Company ceding the invoice
• Drawee company
• Invoice amount
• The interest in the operation
• Rating
• Credit opinion
• The repayment term of the money invested

With these data in hand or, to be more precise, on your computer or cell phone screen, you can compare the options open to you and have full autonomy to manage the investments you decide to make or not to make.

4. Simulate your investment by yourself

To help you make decisions, Inversa has an investment simulator. This dynamic and easy-to-use tool allows investors to predict the money they will get from a hypothetical investment. How?

The person enters the money they wish to invest, the hypothetical operation's return period and profitability in such a way that the platform automatically calculates the profit that would be obtained and the annualized profitability.

5. Decide in what and with whom you invest your money

Information, simulation… decision. The key to enjoying the autonomy to manage investments is to decide when and how you want in what you invest your money.

Crowdfactoring offers small investors the possibility of obtaining a return on their savings and, at the same time, helping companies in the real economy to obtain the liquidity they need to consolidate their business model.

In recent years, ethical investment and impact investment has been gaining ground. These phenomena are evidence of the growing desire of thousands of savers to use their money to support sustainable and socially responsible projects. And that has a positive impact on society and the environment.

Crowdfactoring provides sufficient autonomy in the investments management to enable investors to decide which projects to invest in and which not to invest in.

In such a way, a person can freely decide to buy the invoice of a company that generates employment in his community instead of buying the invoice of another company, even if the latter has higher profitability or a better credit rating.

Thus, autonomy in investment management represents a qualitative leap in the ability of small savers to participate in the financial sector and use their money to stimulate the real economy while obtaining a return on it.

6. Autonomy in investment management: Playing the adult game

We said at the beginning of this article that, as children, we envy the freedom of action of adults. In a way, digitalization and the rise of alternative financing have meant that savers can enjoy the same autonomy as large investors when managing their investments.

In other words: small savers can now play with the big boys.

This democratization of investments is beneficial for savers and all companies, which can obtain the liquidity they want more easily and no longer depend solely on banks to provide them with financing.

Thus, autonomy in investment management is transferred to the other side of the relationship. In this way, companies financed through crowdfactoring also see their autonomy strengthened when planning and managing their finances.

In short, crowdfactoring provides investors, regardless of their size, with all the information and mechanisms they need to manage their investments autonomously and decide freely how to invest their money.