SME Finance, a fintech reinventing growth financing for small- and medium-sized enterprises, has agreed to a new €100 million credit facility from London’s Fasanara Capital. The new funds bring the total commitments from Fasanara to €240 million. The additional credit capability moves SME Finance closer to its 2023 goal of establishing an EU-wide fintech marketplace where any business can access services ranging from traditional business loans to revenue-based financing to embedded finance solutions. The startup has already reached more than €1.3 billion in loan volume and invoice financing with over 2,500 growing businesses, using a digital-first approach that uses machine learning and open banking. 

Small- and medium-sized enterprises (SMEs) account for nearly 99% of all businesses in the European Union, employ between 40% and 90% of the European private sector, and account between 50% to 75% of Europe’s GDP. Although these businesses are a core pillar of the modern economy, they are under increasing pressure from multiple fronts, while legacy banking institutions continue to beat a conventional path more suited to large enterprises. SMEs suffer from a lack of banking and finance partners who are flexible and cater specifically to the rapidly changing landscape of SME reality: disrupted supply chains, warfare, shifting labour markets, a down economy, and rising costs. 

SME Finance, a multi-product, multi-country lending fintech, brings a new, digital-first growth financing approach to SMEs. By deploying AI, open banking, and automation in its loan decision-making, financing, and customer onboarding, SME Finance shortens and simplifies the entire process. Customers can include IT-services companies exporting to other EU countries and requiring invoice financing to tide them over to pay their own suppliers; smaller transport contractors working with larger expeditors and requiring leasing finance; SaaS startups accessing Revenue Based Financing (RBF) based on their fast-growth recurring revenues but limited trading histories; e-shop and e-commerce businesses; marketplace merchants; and SMEs with up to €5 million in turnover, pledging real estate as collateral for a standard credit line. 

Mindaugas Mikalajūnas, CEO of SME Finance, said: “SMEs are a highly attractive credit market for major asset managers, like Fasanara, and we are excited to deepen our partnership. Our mission is to be the number one banking and finance partner for SMEs in Europe, and this extension of our credit facility will help us greatly in making finance accessible for every business. We believe strongly that this sector is one of the cornerstones of our economy, and there is a lot of demand right now for finance partners that speak the language of small- and medium-sized business.”  

Francesco Filia, CEO of Fasanara Capital, comments: “This market has huge potential, with a highly-skilled labour force and innovative niches. It’s an area where Fasanara wants to increase exposure and, because many businesses there are still at an early stage of evolution, that means addressing the SME sector. Our 3-year partnership with SME Finance has been highly successful, creating solid foundations of trust between us. We are excited to be extending it now with a new €100 million line of credit to grow the geographical scope of operations and to encourage the next wave of entrepreneurs throughout the continent.”