Last week, we lowered the minimum turnover requirement in order for SMEs to apply for a loan on Lendix. Initially set at € 700,000 in 2015, brought to € 400,000 in 2016, this limit is now at € 250,000. The “why” of this decline is clear and simple: we want to be able to finance as many quality businesses as possible. What we want to talk about today is the “how”.
The financing of a project on Lendix is done through several steps: data collection and formatting, analysis, credit decision, financing offer, documentation, online release, financing followed by fund disbursement and recovery, if needed. Except online publication, whose duration may vary depending on the amount of the loan, the time and the cost of processing each request is in fact very little linked to the size of the company and its need for financing. In a model with little automation and heavy manual intervention, it is therefore preferable to concentrate on the biggest deals.
At the very beginning of Lendix, automation was concentrated on data collection and disbursement / reimbursement phases. At the beginning of 2016, we launched a project to accelerate significantly all the other phases of the process, apart from the advanced analysis and the decision to grant the loan, which remain 100% human. This work continues today to bear fruits. Now, our tool can read directly the data about the companies from scanned documents and it is not necessary anymore to input so much data manually. This progress is especially major in France, where many SMEs do not publish their financial statements on easily accessible commercial databases. Our scoring model (which determines the terms of a loan, based on risk factors) allows us to offer an indicative interest rate directly to companies online and within a few seconds. The companies can then complete their files within a few minutes. This allows our Borrowers team to better attend to the SMEs in their projects. It also prevents credit analysts from making manual data computing errors and it allows them to focus on better understanding of the business.
The credit revolution for SMEs is based on several pillars: service, transparency, and technology. The fact that Lendix is allowing every day more and more companies to borrow on its platform clearly shows the strength of these three elements.