How October supports Italian SMEs

In July, the French fintech October launched instant lending for SMEs. Thanks to a predictive analysis of credit risk it allows a fully automatic assessment of loan applications of between 30 and 250 thousand euros covered by a state guarantee. It is a continuously growing company and that is why we interviewed Sergio Zocchi, CEO of October Italia, asking him about its goals and projects and also about how the lockdown period was managed.

What are your business objectives for the end of 2020?

We expect the demand for credit from SMEs in the coming months to grow significantly as a result of the economic crisis linked to Covid-19. Thanks to the support of state guarantees introduced not only in Italy but also in France and the Netherlands, countries in which our platform is operative. We are convinced the only way to ensure business continuity, and facilitate the recovery of investments made, is to enable them to overcome the crisis. Our aim is to respond to the liquidity needs that SMEs face today in a quick and easy way. The new instant lending solution we introduced in July goes precisely in this direction. By fully automating the demand analysis process today, we are able to provide an instant response to this credit demand.

How did you cope internally with the lockdown period?

October, thanks to its 100% digital platform, continued to be operative and to evaluate all incoming requests which, as always, were analyzed on the basis of credit risk merit, taking into account the possible impact the Covid emergency has on some sectors. Despite the emergency context due to the pandemic, our lender community of more than 20,000 people continued to be very active and was attentive to the change in the socio-economic framework imposed by the lockdown, welcoming the many initiatives we proposed to support businesses.

Have you launched any special initiatives dedicated to the Italian entrepreneurial ecosystem?

At this difficult time for Italian companies, we have implemented many initiatives aimed at facilitating their access to credit and filling the need for liquidity to help them overcome the emergency as quickly as possible. At the end of March, and independently from the support measures put in place by individual governments, we announced in all European countries, in which we are active, the automatic suspension for 3 months of capital repayments on active repayment plans waiving October fees as a further sign of our commitment. In addition to this, in order to protect our lenders, we have offered companies the possibility of refinancing their loans through public or private guarantees. Finally, July saw the launch of our new instant lending solution which, thanks to predictive credit risk analysis, allows us to fully automatically assess loan requests and provide an immediate loan proposal for credit requests between 30 and 250 thousand euros covered by the state guarantee.

Did you see any new trends during the covid19 emergency? Which ones?

Before the pandemic, SMEs turned to our platform to finance tangible or intangible investment projects for growth, but today companies need immediate liquidity to ensure business continuity. Plagued by declining sales and procurement difficulties, more and more companies are asking us for resources to finance the resumption of production activities, to meet current administrative expenses and to purchase warehouse stocks. What has changed is not only the destination of funds but also the sensitivity of companies to the timing of disbursement of funds, which today represents the main drive in the choice of a financial partner of reference.

From your point of view, since your arrival in Italy has the attitude of companies towards alternative forms of financing such as the one proposed by you changed? How?

Due to the contraction of bank credit, in recent years companies have progressively approachted alternative financing instruments such as direct lending, mini-bonds or advance invoices. The pandemic and the lockdown have also accelerated the dynamics of innovation that were already taking hold, including the use by businesses of digital solutions to diversify their sources of financing.

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Author: Tudor Sava

2 Settembre 2020