FinTech: October, An Alternative Lender To European SMEs, Raises $300M
This summer, October raised € 258 million to lend to European small and medium companies.
October is a pan-European lending platform founded in 2014. It focuses on European SMEs and connects them to private and institutional lenders for their financing requirements. It announced Wednesday its raise during the summer of € 258 million in cooperation with major international investors. (October)
October’s lending to SMEs
October claims it is Europe’s #1 SME lending marketplace. It features 22,370 lenders, including top tier institutions, on its platform. It has lent about € 456 million to 1015 projects in the SME space.
Typically, loans range from €30k to €5m at interest rates starting from 2.5% per annum. SMEs do not need to provide a personal guarantee. The application procedure is a simple online process with an instant eligibility check.
Eligible companies must be based in France, Spain, Italy, or The Netherlands, with a turnover of more than €250,000, profitable, and with sufficient repayment capacity.
Funds are in the borrower’s account within a week.
Fees are a project set-up fee of 3% of the amount of the loan. It further charges a monthly fee of 0.04% of the amount borrowed, included in the monthly repayment amount of principal and interest.
The amount of fundraising of € 258 million is as follows:
- Product #1 / Classic loan: Additional financing of €20m to finance SMEs across Europe (all sectors of activity).
- Product #2 / Tourism sector: A €38m financing from 6 major insurance companies and the CDC (Caisse des Dépôts) for French companies in the tourism sector. These deferred repayment loans support the reopening of the hotel and catering industry and more generally tourism companies.
- Product #3 / State Guaranteed Loan for Italian SMEs: A €200m financing led by Gruppo Intesa Sanpaolo, Italy’s largest banking group. This significant amount would deploy by the end of 2020 using October’s Instant Project technology.
“These investors were all attracted by October’s technology, which allows them to deploy large amounts of money efficiently, while respecting standardized processes, following precise and tailor-made risk policies and relying on 5 years of accumulated data for more reliable decisions,” said Olivier Goy, founder and CEO of October, in a blog.
According to TechCrunch, the funds were not equity. Instead, they are new investments to be directly funneled into SME lending.
October was formerly called Lendix.
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