Invesdor Snags Big Cross-Border Lending Advantage

The European Commission wants to boost small businesses’ access to working capital by supporting crowdfunding innovation, and part of that initiative is to facilitate cross-border lending. But the feat is easier said than done. Varying regulations and currencies make any cross-border transaction cause for a financial headache.

Still, in a global supply chain, businesses and consumers alike are demanding that the barriers of national borders be torn down. It’s led to several new advancements in cross-border finance, though perhaps the largest leap towards cross-border alternative lending comes from Finnish crowdfunding platform Invesdor.

Reports issued Wednesday (April 22) announced that Invesdor has secured a license from the Market in Financial Instruments Directive, or MiFID. While obscure, the directive is crucial to cross-border lending across Europe as it offers a streamlined, single framework that governs lending services across EU member states.

Invesdor, reports said, is the first alternative financer to secure this license. While alternative lenders can legally operate across the European Union, they often must seek licenses for each jurisdiction in which they wish to do business. But with this license, Invesdor can now operate across the 31 nations that comprise the European Union and the European Economic Area.

According to reports, obtaining this license is part of Invesdor’s grandiose goal of becoming Europe’s largest cross-border platform. At present, the company said it holds nearly half of the crowdfunding market across the Nordic region. To help achieve its goal, the company is looking not only to provide financing for technology and software startups, but also for new companies emerging in a slew of other markets including medicine and sports.

The company has already facilitated $4.7 million worth of equity financing through its platform to date, and its investors hail from 27 different nations, reports said.

Last month, the European Commission published a green paper outlining capital markets reforms aimed at facilitating cross-border crowdfunding. While experts note that obtaining consensus on these regulations across all 28 member states would be difficult, the EC is accepting feedback on the report, and hopes to finalize its proposal by 2019.