Alternative Investment Platform Debitum Recommends Companies should Invest in Loans Secured with Real Estate

Based in Lithuania faultThe company, which offers limitless finance for small businesses, notes that many people now understand that smart investments are a great way to save money for later or bigger purchases.

However, Debitum claims that companies or businesses “rarely” think about investing their excess funds or assets. The alternative investment platform suggests effectively allocating the funds accumulated by companies.

Debitum writes in a blog post that sometimes companies need to borrow, and there is also a time to start saving. When businesses need funding for investment initiatives or further development, many of them may turn to a bank or other traditional financial institution.

However, companies may also want to consider the “right” investment products to suit their risk profile or needs.

As noted by Debitum, platform investment data and conversations with customers show that dividends “make up a large proportion of the funds invested”. This means that “following the shareholders’ decision to pay dividends, the 15% income tax was paid and the amount that could have been invested was reduced”.

Debt adds:

“According to experts, instead of paying dividends, shareholders could collect this money and invest it later on behalf of the company. This would make it possible to pay less taxes. While the investor would still have to pay income tax on their investment, it would be a significantly lower amount than income tax on the entire value of dividends. “

Debitum noted that there are also instances where the owner of a business may need to reinvest the funds received from the dividends back into the business. This may be due to changes in the market situation such as the COVID-19 pandemic and the resulting challenges.

As the Debitum explains, this means “the money is lost, not to mention all of the extra procedures that could otherwise have been avoided.” The alternative investment platform added that “Income tax is levied first on the payment of dividends “And” then the articles of association of the company must be amended to allow the reinvestment of dividends and the decision to increase the capital of the company must be registered in the Center of Registers. “

As explained by Debitum, “risk” and “liquidity” are important considerations when investing. These indicators are “important no matter where and when you invest”, but for companies the risks “should be assessed much more carefully,” recommends Debitum.

The company adds:

“Investors should consider the company’s peak seasons (certain time periods may require more funds to be invested in day-to-day operations) and carefully weigh the estimated income and expenses.”

Further comments due;

“When planning investments, companies should adopt stricter strategies, choosing short-term investments and safer projects. Alternative investment platforms could be a good choice for investing as they allow the selection of projects with different maturities from 2 weeks to 2 to 3 months or even longer and loans with different risk profiles. Estimated return on investment forecasts are also available, which is impossible in the stock market. “

The Debitum team also mentions that investment platforms have their “variables”. Investors can use special instruments that can be controlled to a certain extent, e.g. B. the level of risk, the “desired return on investment” or “additional security parameters such as the selection of loans with a buyback guarantee”.

According to Debitum, it is important to choose a platform that provides “transparent” information about its activities and has “reliable credit risk assessments”. For example, the credit risk assessments for the Debitum platform are “carried out by a reliable third party, e.g. B. Scorify in Lithuania or other experts in other countries, ”says the company. This offers “more trustworthiness compared to risk assessments by platform representatives,” says Debitum.

Alternative investment platforms offer investments in many different types of loans, but for businesses, business projects are the best option, suggests Debitum.

The alternative investment platform also found:

“Companies should invest in either lower risk business loans or real estate-backed loans. The decision to offer investment in loans [via] Due … [should be taken while considering that] The bad debt portfolio on the platform … is surprisingly small [and] Liquidity is one of the highest on the market. Those who prefer short term investments have a wide choice. “

Debt added:

“In addition to the selection of loans on the platform, the way in which the platform managers present information is another important factor. When investing on behalf of a company, the information available on investment increases, taxes, etc. must be correct, as it must be included in the company’s financial statements and all the figures in the accounts of the investment platform and the investing company must be correct. “

(Note: More information can be found here.)