FinTechs are increasingly pushing into the SME finance market. But classic financial service providers counter with fully digitized processes and a lot of experience in corporate banking. In the end, the customers benefit.
Companies looking for suitable financing are now also finding what they are looking for on the Internet. The range of offers ranges from provider-independent financing intermediaries to arranging loans, in which private investors act as lenders. And some banks are already getting involved in lending in cyberspace. Which offer is worth a click mainly depends on the planned financing project.
Credit marketplaces: financing in the algorithm
Financing platforms work according to the broker principle: companies enter their financing plans online on the provider platform and, after checking, receive a selection of offers from partner companies, for example commercial banks or leasing companies. One of the main promises of the financing platforms, in addition to independent product and provider comparison, are particularly simple and fast processes. The financing platforms rely on digitized application routes and databases lined with provider criteria and risk parameters. So the theory.
In practice, however, this process is often still difficult. One hurdle at the moment is above all the automatic checking of the key figures with regard to a reliable rating or the very complex connection to the scoring models of the bank partners. The marketplace concept can only be optimally represented when all data, eg from balance sheets and credit checks, can be automatically imported via interfaces. In the end, it is often the case that the marketplaces pass the customers on to their partners after the preliminary check and the negotiations then take place directly between the customer and the bank.
Crowdlending: credit from everyone
Crowdlending platforms follow another principle: on the one hand, they act as a middleman for financing through professional investors, such as foundations and specialized funds, which provide the means of lending against a corresponding return. On the other hand, they mediate classic crowdfunding, in which a large number of private donors also raise the amount of the finance for a corresponding return. One or the other financing project, which from the perspective of banks is not sufficiently secured, gets a chance with crowdlending.
But there is no guarantee of funding for crowdlending either. And the borrowers pay the willingness to take risk of the lenders with a mostly clear interest premium. Companies hoping for financing from private investors must also be prepared to present their financing project in detail to a broader public.
Entrepreneurs remain skeptical
Online credit marketplaces in Germany are still rather difficult. According to a survey by the auditing firm Deloitte in 2018, only 2 percent of small and medium-sized companies in Germany plan to process their financing exclusively online in the future. A third therefore relies on a combination of personal and digital processing. More complex financing projects will probably continue to be implemented in the foreseeable future in direct contact with the personal financing advisor, especially since various financing modules and collateral situations are often to be illustrated here.
Banks go along
Here the classic financing providers score again. Especially since they have also started to enable their commercial customers to use purely digital processes for borrowing or to digitize the first process steps in the more complex segment. Lite Lender Bank is a pioneer in digital lending: Since spring 2018, it has enabled your customers to take out fully digitized borrowing including e-signature and video legitimation for business loans for the first time. Thanks to the smart digital process, payments are often made within one working day of the application.
In the area of more complex financing structures, Lite Lender Bank now offers its customers to send the annual financial statement documents in a secure procedure directly via the tax advisor / auditor in digital form. This streamlines and speeds up the process considerably. The next steps to improve customer convenience are about to be implemented.