WHAT IS DIRECT LENDING
For investors(only institutional)
HOW DOES IT WORK?
Direct lending is loans provide directly from non-banks.
This activity allows SMEs and large corporate to sell commercial credits to sustain working capital and to obtain medium-long-term loans for growth projects, acquisitions or debt re-financing.
Loans are provided directly by fintech platforms and financed by:
• private players (Peer to Peer Lending o P2P)
• institutional investors, through specialized investment funds (alternative investment funds or AIF) or through saucerization deals of loans provided by fintech platforms.
Direct lending is an important instrument for diversifying sources of finance for companies and allows to cover the gaps compared to traditional service models. The largest part of direct lending deals are closed through fintech platforms that allow, thanks to the use of digital infrastructure and a large use of data and technology, to offer companies a simple and efficient answer to their credit needs.
In the most case, the company submits its request directly on the website of selected operator through a simple guided procedure, provides the required docs (even just the VAT number) and receives the results of the verifications of the economic-financial strength and sustainability of the loan.
According to the amount requested, duration and type of financing, specific docs on the use of funds and the company’s growth prospects could be demanded.
THE BENEFITS OF DIRECT LENDING
The main benefits of direct lending are:
• Speed, with efficient process but rigorous digital native processes in term of compliance and credit rating
• Simplicity, thanks to a data acquisition approach focused on the user experience
• Specialization, with operators focused on selected products and high finance skills to easily get into the investment’s project.
This combination guarantees focus and easy dialogue, with deliberation and distribution timing from a few minutes to 3/4 weeks, depending on the type of product and amount requested.
The results are clear: EUR 2.3bn in loans granted during the first 6 months of 2022, more than a fourfold increase compared to the same period in 2020.
THE ROLE OF AZIMUT DIRECT
Direct lending from a fintech perspective is an efficient, solid and secure solution. In fact, speed and digital do not mean less accuracy: fintech operators are regulated operators and an increasing number of fintechs have signed collaboration agreements with operators in the traditional finance world, providing them with the method and technology to quickly manage a growing amount of files.
And this is what Azimut Direct, the fintech behind the Azimut Group's neoFinancing project, is working on today.
Integrating the supply chain to make the market larger, encourage investments and increase trust in these services for the benefit of our SMEs.
Shortening the supply chain by using of fintech platform guarantees method, tracking and control, and allows private assets management to be directed in the most efficient way to the economy that produces.