SME Finance, the fintech reinventing small and medium-sized business growth financing, has launched Smart Loan – a revenue-based financing solution offering a fairer and faster AI-powered service for startups and SMEs , including e-commerce sites, looking for unsecured loans. loan up to €50,000.
SMEs are the backbone of modern economies. They represent 99% of all businesses in the European Union, employing around 100 million people, or just under 43% of the total European private sector. SMEs represent 10 billion euros in turnover, ie more than half of European GDP.
However, they are generally overlooked by traditional banks, which view their needs as unprofitable. Many entrepreneurs say they feel left out by banks’ mechanical and restrictive lending criteria, which typically require a minimum of two years of negotiation and don’t factor in growth potential. As a result, many SMEs remain underfunded and exposed to serious business difficulties, with the difficulty of accessing business finance increasing significantly as business size decreases, according to the most recent European Central Bank survey. (ECB) on access to finance. (SAFE) in the euro area.1.
Smart Loan was designed by SME Finance as an alternative to the traditionally slower, more conservative and potentially biased lending practices of traditional banks. Its use of AI and open banking shortens and simplifies the financing process for businesses and introduces unbiased lending criteria derived from contextual transaction and cash flow data. The loan decision takes less than an hour and the loan is transferred within 24 hours. The data can all be provided remotely and digitally, reducing the bureaucratic burden for businesses when borrowing to grow.
Mindaugas Mikalajūnas, CEO of SME Finance, said, “We understand the challenges faced by entrepreneurs in startups and SMEs looking to grow their businesses. Traditional banks are far too conservative in their approach and do not take into account the individual potential of each company. SME Finance’s next generation business financing facilitates access to working capital and growth opportunities for start-up and non-start-up companies. Our new smart loan is a fairer and faster alternative to financing offered by traditional banks and venture capital financing, even for businesses with short business histories.
Traditionally, when assessing credit risk, banks ask for a lot of information and documents. Large companies with an in-house finance department can handle this task relatively easily, but the process creates challenges and costs for smaller companies.
The SME Finance Smart Loan also offers greater flexibility. It allows the size of the available loan to scale with the client, from €5,000 to €500,000. If a business successfully repays a loan and its revenue has increased, it is eligible to receive a larger amount to generate additional growth. The repayment tenure of the loan can be up to 36 months depending on the financial details of the business.