There are several reasons why loan originators use Debitum as an additional funding source:
- Liquidity - loan originators use Debitum to access financing on demand. The platform provides instant liquidity for loan originators when they need working capital. For instance, this could happen when a loan originator has a quickly growing portfolio and lends out all funds from other financing sources.
- Speed - our due diligence process and on-boarding process is significantly faster compared to standard liquidity providers (e.g. banks or investment funds) and loan originators can access additional funding faster.
- Flexibility - our partners are not constrained by fixed interest rates, asset terms, or harsh covenants that would strongly limit loan originators' operations and financial freedom. Loan originators can offer different interest rates, asset terms, industries as long as our partners comply with our evaluation criteria
- Eligibility - most of the investment funds which provide funding for financing companies have big minimum investment criteria. Therefore, financing companies with small portfolios are not able to meet those criteria. Also, a lot of banks do not finance SMEs and they are not willing to finance SME financing companies. Debitum provides an opportunity for smaller SME financing companies to access funding at favorable conditions.
- Diversification - SME financing companies usually are not willing to rely on only one financing source and seek diversification by acquiring funds from several sources.