New service provides senior financing to SMEs in Germany

Online SME financing specialists Creditshelf has launched a diversified debt fund for institutional investors supporting German SMEs.

Cornerstone investment will be from The European Investment Fund (EIF), using resources from the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe, or Juncker Plan.

The EIF will invest €30 million in the creditshelf Loan Fund, a diversified loan fund providing senior financing to SMEs and small-mid-caps in Germany originated via the German online lending platform creditshelf. The fund is a close ended private debt fund available for qualified investors that seek exposure in this asset class. The fund target size will be up to EUR 150m, targeting to invest in more than 150 loans to German SMEs. The fund will invest through the platform alongside creditshelf’s existing institutional investors. As a result, creditshelf’s SME borrowers will profit from increased funding.

creditshelf is the first online lending platform specifically focused on the German market that EIF supports. The EIF subscription follows a thorough commercial and risk review process during which the EIF and creditshelf shared expertise in private debt and online direct lending market dynamics. Under the new investment programme for debt funds created within the Juncker Plan, called the “Private Credit Tailored for SMEs”, the EIF seeks to invest in diversified pools of SME credits supporting its mandate to foster a functioning capital market across the European Union helping to propel the transmission mechanism of funds flowing into private credit markets.

founded in 2014 and based in Frankfurt am Main, Creditshelf sees itself as a market and technology leader in the fast-growing digital SME finance business in Germany.

The company’s core competencies include the selection of suitable credit projects, credit quality analysis for potential borrowers, credit scoring, and risk-adequate pricing. creditshelf receives fees for its services from both the SME borrowers and the investors.

Nurture and sustain

European Commission Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: “Small and medium businesses are the main drivers of the EU's economy. We need to nurture and sustain them using all means at our disposal. Thanks to this EIF investment under the Juncker Plan, 150 SMEs in Germany will have the opportunity to apply for financing to grow their businesses."

EIF Chief Executive Pier Luigi Gilibert said: “Through its diversified debt fund, creditshelf will provide innovative non-bank finance solutions to SMEs based on swift deployment and a flexible approach. Our cooperation with creditshelf - with the support of the Juncker Plan - demonstrates Europe’s strong commitment to improving access to finance for small and medium sized businesses in Europe. This will also help to strengthen the alternative private credit market in Germany, which is still lagging behind compared to some other EU economies.”

About the Investment Plan for Europe
The Investment Plan for Europe, known as the Juncker Plan, is one of the European Commission's top priorities. It focuses on boosting investments to create jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment and providing visibility and technical assistance to investment projects. The European Fund for Strategic Investments (EFSI) is the central pillar of the Juncker Plan. It provides a first loss guarantee, allowing the EIB Group to invest in more, often riskier, projects. The projects and agreements approved for financing under the EFSI so far are expected to mobilize almost EUR 439.4 billion in investments and support around more than one million start-ups and SMEs across all 28 Member States.

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

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