Bankera, a Lithuanian FinTech project building a neobank for the digital era, has started to offer business loans for small and medium-sized enterprises (SMEs). The model for Bankera Business Loans was developed at the European Commission hackathon as a response to COVID-19 back in April, and in less than 3 months, the team behind the project was able to fully implement the idea and bring it to market. The lending solution ultimately aims to aid a market segment that has been underserved and misconceived by legacy banks.
Despite the easing of restrictions necessary to stop the spread of COVID-19 around Europe, a number of businesses are still at risk. While cash-rich businesses have better chances to cope with the decline in sales, most small and medium enterprises have very tight cash flows. Therefore, they have lower chances to survive. By not getting cash from sales, they would not be able to pay their suppliers and the financial distress could spread over the whole supply chain. Hence, as it is in the suppliers’ interest for their clients to survive, Bankera’s team decided to create a loan product which accepts supplier’s guarantee as additional collateral. Also, by bringing both parties of the transaction to the table, Bankera, as a lender, can make a more informed lending decision, which is in the interest of all the parties involved.
“We aim to help emerging digital businesses to deal with their financial needs from payments to financing. Therefore, we launched Bankera loans product at this time, not only to help businesses to survive the distress caused by the pandemic, but especially to capture new opportunities as lockdowns have also boosted the digital shift of the economy. From a lender’s perspective it is a unique time to start building a loans portfolio” says Vytautas Karalevicius, the co-founder of Bankera.
The range of Bankera Business Loans services includes business invoice financing (factoring), refinancing, along with short-term lending services that aim to relieve business development or digitization costs. Interest rates are determined for each loan individually by evaluating a variety of variables during the application procedure. Loans range from 2,000 to 50,000 EUR and are offered for a maximum period of 2 years with a possibility to postpone the payment.
For now, Bankera Business Loans are available for Lithuanian based business only. However, on a case by case basis and depending on their business model companies and freelancers across Europe would be considered for a loan.
In addition to new business loans offering, Bankera is already providing individual and business multi-currency accounts, payment processing services and is planning to introduce payment cards by the end of this year. Ultimately, Bankera is building a full-stack financial solution for digital businesses.
Bankera Business Loans was developed at the pan-European hackathon #EUvsVirus led by the European Commission where the solution was named the winner in the Digital Finance category. This achievement was also acknowledged by CaixaBank, which awarded it a special financial price. In June, Fintech Week Lithuania recognized Bankera’s efforts of contributing and implementing goals for a sustainable future in the business community and awarded it the Business Impact of the Year prize.