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.