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.
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.