The Parisian fintech Silvr wants to use the new credit line to be even more active in the existing markets of France and Germany.
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Frankfurt The Paris fintech Silvr can arrange new loans of up to 200 million euros. To do this, it works with the major US bank Citigroup and Channel Capital, a manager of alternative investment funds. The Handelsblatt learned this in advance from the company.
“The demand for credit has increased significantly across Europe, so we are pleased to be able to meet this demand with the new credit line,” said Nima Karimi, CEO of Silvr. Since it was founded in 2020, the company says it has distributed a total of more than 150 million euros in financing to “several hundred” small and medium-sized companies in France and Germany.
Silvr acts as a broker between banks and companies. “Banks arrange the loans through us because we can evaluate company data much faster, evaluate the past performance of customers and forecast future income,” said Karimi. Other fintechs are also active with this business model, such as the Swiss loan start-up Teylor and the Berlin start-up financing platform Recap.
The business with loans for small and medium-sized companies is also in the focus of the banks. At the beginning of July, the British bank Barclays Teylor, among others, provided 275 million euros for new loans. Teylor granted around 170 million euros in loans last year and, according to its own statements, is planning a financing volume of around 300 million euros to over 500 customers this year.
In June last year, Recap received a credit line of more than 100 million dollars (about 95 million euros) from Silicon Valley Bank, which went into crisis in March of this year. According to the company, the credit line is not affected.
According to its own statements, Recap has more than doubled its key figures since the beginning of the year: The company has lent a three-digit million amount to more than 1000 companies.
Interest for banks of up to nine percent possible
Karimi explains that financing via intermediary fintechs is cheaper for the banks. The lending companies usually earn a one-time fee for the connection. They also receive a monthly fee depending on the loan volume lent.
The banks, in turn, earn a variable interest rate on the money provided. According to information from the Handelsblatt, this corresponds on average to Euribor plus a surcharge.
Euribor is the average interest rate at which European commercial banks lend money to each other. It corresponds to the respective term – currently 4.1 percent for a twelve-month term. In addition, there is a surcharge of two to five percent on the capital lent to small and medium-sized companies.
“Before the turnaround in interest rates, the tariffs for companies were still significantly cheaper because banks had fewer alternatives for investing their capital,” said Teylor founder and CEO Patrick Stäuble. Prices have increased significantly in recent months. In addition, financial institutions do not have to show the individual loans in their own balance sheets, as this is done via the partner companies.
Business expansion in Germany
The Parisian fintech Silvr wants to use the fresh money to be even more active in the existing markets of France and Germany. By 2025, the company wants to have granted a total of one billion euros in financing volume. The company has only been active in Germany since the beginning of this year and, according to its own statements, has so far granted a financing volume of around ten million euros to a few dozen companies.
Silvr had already received funds of 112 million euros last year. The new credit line will initially amount to EUR 67 million and can be increased to EUR 200 million subject to the approval of the lenders.
More: Silicon Valley Bank gives Berlin platform Recap $100 million line of credit