CrediNord is the online platform for business lending aimed at SMEs and Micro-Enterprises. They are on the mission to re-invent business lending in Europe. CrediNord is designed to solve the business owner’s cash flow challenges so that they can focus more on their core business.
The company’s story rises from the stories of deep frustrations among business owners with inadequate lending services from traditional lenders. The founders decided that getting a business loan for one’s company should not be hard, complicated and time-consuming.
CrediNord’s CFO, Matias Peltoniemi, has provided Everly.eu with an exclusive interview in which he addresses the current challenges of the company, the state of the Fintech and lending world, and what he believes is the future of Fintech and lending.
First could you tell us more about you and what led you to CrediNord?
I am in the banking industry for +10 years now and I worked for Nordea which is a commercial bank and is the largest financial services group in the Nordic region and one of the biggest banks in Europe as well. So you may say that my approach has been top-down when working my way towards lending and understanding the vast needs that these underserved SMEs hold. That later led to the CFO role in CrediNord. I’m also responsible for developing our strategic partnerships and investor relations.
And what exactly are the services you are providing to SME’s?
We are really focused on working capital loans and lending to SME’s and micro-companies. Our options are to lend from 1.000€ to 100.000€. This is really suitable for smaller companies that are able to cover their expenses and we are trying to make it as easy it gets for those companies to be able to reach the money they need. It also works for freelancers as self-employed. Our typical customers is a limited partnership which has a turnover of about 400.000€.
How did the pandemic situation affect CrediNord?
The pandemic sure hits smaller companies harder than it does to larger ones. These smaller companies that we tend to serve are usually shorter on reserves and therefore more vulnerable for black swans like this. At first, we wanted to understand the big picture and how it should affect different sectors. During the first weeks, we were more focusing on helping our current customers rather than acquiring more. Following months we analysed our portfolio performance and made minor changes to our scoring to proceed with lending activities in this new normal environment.
What is exactly the difference between CrediNord and traditional banks or similar companies?
Our key idea is to keep things simple and easy to use. Our product is also really flexible so there are no penalties or hidden fees. We’re operating on a subscription-based model so we see our instalment loans like the Spotify of lending. We saw that long lead times were a common problem for smaller companies when they applied for loans from traditional lenders. When you need a loan immediately, it can be frustrating when it takes days or even weeks to get a decision. Regardless of whether we grant a loan or not, the company receives the decision within 60 minutes and is able to complete the order fully online.
What is the plan for the future for CrediNord?
We would like to expand the variety of lending solutions we provide to our customers. And around lending, you can easily have more features. But we already have something planned for the next year that would enhance the customer experience. We are already launching our business in the Netherlands and we have our growth strategy in place for more expansion beyond the Nordics.
And who are you customers exactly?
We want to help companies that are profitable but temporarily need cash flow to hire people or cover-up for end customers or suppliers who can not pay on time due to their own financial challenges. They have neither the time nor the patience to spend days applying for loans, they need to focus on their business. We have seen that our customers really appreciate our concept so that they can keep their business going.
How do the companies choose where to get their loan in the first place?
In our case, the customers mostly choose our service because of the convenience and flexibility, not based on the price. Our customers usually need the money as soon as possible and as I mentioned we are trying to adjust our services so they will get the decision when they need it not in the next weeks as they will most likely get it with the traditional lenders.
What is going to happen when the pandemic is gone and what is it going to mean for CrediNord?
I am an optimist so I believe that once this dark era is over and people will once again start believing in tomorrow things will way better. The demand has been held back in different sectors so after the pandemic is over, there will be a good stream of investments and therefore underserved demand for working capital. I believe it’s going to be the golden twenties again, so we want to be in as many markets as possible and help the businesses thrive once again.
And what are your goals that are related to that?
We definitely want to broaden the offering to the SME’s by executing our growth strategy. There are a lot of opportunities for example related to open banking and we aim to capture them. Our goal is to become a leading solver of SME cash flow challenges in Europe. I would like to also say that we see the world of Fintechs and banks as a place for partnerships and that in partnerships is the power. The companies shouldn’t be against each other, we believe that we should work together because there are common goals for both banks and Fintechs.
What was the biggest failure of CrediNord?
We believe that every day is a school day and we need to keep learning. In the past, we focused on some of the customer acquisition channels that with today’s experience we would consider pointless. So we are learning every day and we are trying to find global maximums and not just local ones. That makes it a bit more difficult but also more rewarding.