Auxmoney, the largest German p2p lending marketplace, today starts financing SME loans. In the past Auxmoney focused on consumer loans of up to 50,000 EUR. Now loan amounts will get much bigger. Auxmoney will finance SME loans from 10,000 to 750,000 EUR at APRs between 2.7% and 11.9% depending on credit rating. Available loan terms range from 6 to 60 month. Applying companies will have to submit accounts and a list of otstanding debts. Unlike most banks Auxmoney says it will not require a director’s guarantee.
Under German law (KWG) a transaction bank is required to formally originate the loan. For the SME loans Auxmoney will cooperate with Solarisbank while continuing to use SWK Bank for the consumer loans.
In 2018 Auxmoney financed 551M EUR in consumer loans, which were funded by both retail and institutional investors.
SME loans have not been an easy market for German p2p marketplaces in the past. Lendico was bought by ING Bank and in my view the growth figures of Funding Circle Germany (which came into existence by Funding Circle buying Zencap) are far from impressive so far.
Auxmoney operated at a loss of 5.5M EUR in 2017 (the latest year for which accounts have been published), but CEO Raffael Johnen says the company has reached break-even.
Johnen is confident that the platform technology and the amount of data available for credit scoring will give Auxmoney a competitive edge.