Loan financing for SMEs when the house bank says no

First of all, we are very proud that in 2021 we were able to achieve the stron­gest start to a fiscal year since our foun­ding. This shows that our plat­form works and that private debt is a neces­sary finan­cing supple­ment in Germany. With our offe­ring, unse­cu­red debt solu­ti­ons up to EUR 5 million, we address a diffe­rent segment than clas­sic private debt funds, which usually target larger indi­vi­dual tickets. Our clients are usually smal­ler medium-sized compa­nies, with an average turno­ver of around 15 million, or they are tran­sac­tion requests in the single-digit million range for M&A, MBO or MBI projects, which are also too small-scale for loan funds and are also often not prio­ri­ti­zed by banks.

Due to our smal­ler indi­vi­dual tickets, we were a little under 1 million euros here in 2020, we rely heavily on digi­tal proces­ses and parti­ally auto­ma­ted risk analy­sis. This enables us to act very effi­ci­ently and we are also very quick in provi­ding feed­back to our custo­mers. Our promise is that the custo­mer will get a binding answer after 48 hours.

We do not have any real focus areas in our loan selec­tion, but rather repre­sent a good cross-section of the German economy here. Howe­ver, we do of course make an up-to-date assess­ment with regard to the indi­vi­dual sectors and also adjust this on an ongo­ing basis. For exam­ple, we have virtually no expo­sure to the hospi­ta­lity and tourism sectors. Certainly not a disad­van­tage at the moment due to the diffi­cult situa­tion there.

Last year, we also incre­asingly finan­ced asset-light busi­ness models from indus­tries such as soft­ware-as-a-service, cloud compu­ting, or e‑commerce, which have a strong need for growth finan­cing. Like other lenders, we natu­rally exclude contro­ver­sial indus­tries such as arma­ments and gambling.

Our terms and condi­ti­ons for borro­wers are gene­rally in the mid to high single-digit percen­tage range, with an average of 6–8 percent last year. Here, I would like to empha­size that we gene­rally operate in the unse­cu­red area, with corre­spon­ding effects on our risk margin.

As for many other market parti­ci­pants, the time since the outbreak of the Corona pande­mic has been and conti­nues to be very special and in many ways unchar­ted terri­tory. After a year, howe­ver, we can say that we are coping well. The work­flows func­tion “remo­tely” smoothly and we recei­ved loan requests of appro­xi­m­ately 1.5 billion euros in 2020. Follo­wing a corre­spon­ding analy­sis, we disbur­sed around 100 million euros. — This is despite massive state inter­ven­tion with subsi­di­zed funding and thus a de facto aboli­tion of market-based pricing. It remains exci­ting to see how the tradi­tio­nal banks, which in 2020 only opera­ted with the support of the state, will behave. Howe­ver, growth capi­tal is needed for the future, and we are ready to provide it.

About Dr. Daniel Bartsch

Dr. Daniel Bartsch has 15 years of expe­ri­ence in inter­na­tio­nal consul­ting and banking. Most recently, he held various posi­ti­ons at UBS, inclu­ding senior posi­ti­ons in Zurich and Singa­pore. After gradua­ting with a degree in busi­ness admi­nis­tra­tion from the Univer­sity of Mann­heim in Düssel­dorf, he comple­ted his docto­rate on a capi­tal market rese­arch topic.

About credit­s­helf

credit­s­helf is the leading lending plat­form for digi­tal SME finan­cing in Germany. Foun­ded in 2014, the Frank­furt-based company arran­ges bank-inde­pen­dent, flexi­ble finan­cing solu­ti­ons through a steadily growing network. credit­s­helf ther­eby combi­nes comple­men­tary needs: While medium-sized entre­pre­neurs can easily access attrac­tive finan­cing alter­na­ti­ves, insti­tu­tio­nal inves­tors can invest directly in German SMEs and coope­ra­tion part­ners can support their clients as inno­va­tive provi­ders of new credit solu­ti­ons. The core of creditshelf’s busi­ness model is a unique, data-driven risk analy­sis as well as unbu­reau­cra­tic, fast and digi­tal proces­ses. The entire value chain comes from a single source. The credit­s­helf plat­form is used to select suita­ble loan projects, analyze the credit­wort­hi­ness of poten­tial borro­wers, provide a credit scoring, and deter­mine risk-adequate pricing. For these services, credit­s­helf recei­ves fees from both borro­wers and investors. — 

credit­s­helf has been listed in the Prime Stan­dard segment of the Frank­furt Stock Exch­ange since 2018.