Looking For the Perfect Balance between Risk and Return



A steady portfolio requires a processing that lasts six months. Here we explain why

How long does it take for the investment in BorsadelCredito.it to start producing returns? How much is it necessary to be patient to guarantee a portfolio in which the risk is as limited and controlled as possible? Why are the money disbursed not invested immediately?

In today’s editorial we will try to give an answer to these that are among the most frequently asked questions by our investors. And let’s start with a premise.

The lending marketplace has a simple operation , based on a “golden” law of the economy, that of supply and demand . On the one hand there are companies that require credit, on the other hand the lenders who decide to invest their savings in the real economy. The two subjects meet in the marketplace, which works and is in balance when demand and supply coincide. And this basic feature of the lending marketplace is also the answer to one of the questions most often pose the BorsadelCredito.it Service, or because you need a little ‘time to invest availability. An application that is in fact also being asked to other companies in the sector, as reported for example by the Estonian Bondora here platform, which explains how its lenders prefer positions with the higher rating and flock to those for which the expected return is still above 8%. This overcrowding produces a delay in employment, due to the law of supply and demand.

For BorsadelCredito.it the situation is slightly different. In fact, for the Lender investing in BorsadelCredito.it, the expected return (which at the end of March was around 5.5% and which is constantly above 5% since the start of the platform activity) arrives on average after approx. four months . The reason? The very careful selection of companies arriving on the marketplace.

In search of the perfect balance between risk and return


In search of the perfect balance between risk and return


We will finance a small part of 100 companies that require funding on the platform. Most do not pass the feasibility check that has stringent posts and rewards only companies that have a solid project and show us great reliability and transparency.

Our selection process is very careful: we talked about it here . The process is based on a powerful algorithm that evaluates a series of quantitative parameters and mixes them with qualitative elements, such as the reputation on the web, and returns a discrete score, a “rating” to define the creditworthiness of the company . Then follows an evaluation through one of our consultants that serves to confirm the elaboration of artificial intelligence. Only those who pass all these exams access the marketplace. And it is a necessary procedure to mitigate portfolio risk . We control risk in many ways, with selection, diversification and an ad hoc protection fund: this is an extremely important element for the system to work. And one of the strategies to make the portfolio as safe as possible is that it is invested in companies that do not pay late and that do not create unpaid debts. Getting the return on your investment up and running requires an average of four months: a time needed to obtain credit quality .

Another important step is the return of capital. After the first two months, in fact, the companies to which the Provider has disbursed the funds, begin to repay the installments . If we choose to lend in all markets and at average rates as the managed profile provides; times are longer if you choose to lend only in some markets and at higher rates than average ones. It is a process of mediation between risk-return and speed. We are looking for the perfect balance.




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