Embrace digitisation of finance

Every year, the Dutch Central Bureau of Statistics asks companies about their financing needs and activities. This financing monitor showed that last year 22 percent of companies needed external financing. That was about the same as the year before. A substantial number of them, some 23,800, managed to attract financing, but there were also an estimated 6,300 companies that failed to do so.

Fundable, yet no financing

In many cases, there will be good reasons for this, but there are certainly companies that can be financed but still do not receive any financing. That is a missed opportunity. In roughly half of the cases, the rejection of an application meant that an expansion could not go ahead. In more than a quarter of the cases, the hiring of new staff was cancelled.


The most common reason for failure is that the business cannot offer enough collateral. This applies to four out of ten rejections. This concerns collateral or mortgage rights, a guarantee or joint and several liability, for example.


Digitisation of collateral information

During a panel discussion at the Topicus Advisors Day, the problems with collateral were discussed at length. This is a barrier for banks because it takes a lot of work to get clarity about the collateral of a customer. In the case of smaller loans in particular, the costs often do not outweigh the benefits and no further inventories are made.


Digitalisation could play a major role in solving this problem, said Ronald Kleverlaan of of the SME Funding Foundation (Stichting MKB Financiering). If information is standardised and easily accessible, it can simplify the application process. "The process is still very old-fashioned. The moment it is automated and exchanged, everyone in the entire chain will benefit."


Entrepreneur and financier must find each other

Another obstacle for entrepreneurs looking for financing is that the market is not transparent. Many new providers have emerged in recent years, so there is a good chance that there is always a financier who is willing to give a loan if a traditional bank will not do so. The only thing is that the entrepreneur and the financier have to be able to find each other.


This is difficult in practice because for most companies the bank is still the most important information channel for orientation. According to the Financing Monitor, this applies to 72 percent of businesses. If an application gets stuck at the bank, that is often the end point, despite the fact that there are probably alternatives.


It is the task of the advisor and all those involved in the chain to prevent this. By giving sound and independent advice, but also by taking a broader view. It is of course impossible for the advisor to enter into an individual relationship with each financier, but with the rise of online platforms this is no longer necessary.


There are now more than twenty financiers connected to our digital marketplace. At the moment, several applications are received every day, and some funders immediately accept them.


The digitisation of the financing chain can therefore make an important contribution in various ways to increasing the chances of entrepreneurs obtaining financing. If only a small part of the group that is currently missing the boat can be helped, it can easily amount to hundreds of companies per year that can seize their growth opportunities. For financiers and advisers, this is an extra reason to embrace digitisation