Qualitative multicase study reveals timely access alongside high interest rates and limited transparency across lending crowdfunding platforms, highlighting trade-offs for small enterprise financing.
Lending business crowdfunding (LBC) is an innovative financing tool for small and medium enterprises (SMEs) and is especially useful in vulnerable and risky markets. To date, little is known about the information transparency and management dynamics of these new platforms, partly as a result of a lack of harmonization in the crowdfunding sector. This article draws on a qualitative multicase approach to map and classify the main characteristics of the credit supply provided by nine LBC platforms. The database is unique and makes this analysis particularly original. The study found some limitations to the information transparency on services offered to SMEs who could access LBC. Alongside this, some advantages emerged, such as the timeliness of the service, and some critical points, such as the high interest rates and the numerous fees applied to the crowd-borrowers. The study also has practical implications, allowing SMEs to carefully assess the costs and benefits of the LBC model.
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Stefanelli et al. (2022) studied this question.
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