Interview with an institutional investor on Debitum Network platform

03 May, 2019

4 min read

Since its’ inception Debitum Network has aimed to be a platform that is open for both individual and institutional investors. We want to grow and offer a large variety of assets with attractive interest and all safety guards for users on our platform. It has been 9 months since it went live, and we managed to attract quite a large number of individual investors and some institutional ones. We sat down to talk with one who invests for his company and asked about his experience investing on our platform. Below is the interview!
DN – Debitum Network

INV – Institutional Investor

DN: What is your investor’s profile – how and what do you invest in?

INV: I represent an investment company which is investing significant amounts into the SME sector throughout Europe. We analyzed this sector and we believe that currently, it’s a great opportunity to get a really attractive risk and return ratio. This sector seems to be healthy, growing and there is a possibility to earn two digit returns.

DN: How could you describe your investment in Debitum Network goals?

INV: I guess that most of the investors and our investment company is not an exception, seek for safe and liquid investments with attractive return rate. Our goal is to earn at least 10% p.a. return. We are also satisfied with around 8% return p.a., provided the investments are short-term and we have more flexibility.

DN: When did you decide to invest on Debitum Network platform?

INV: We have been investing on Debitum Network platform almost from the beginning – from late 2018. We are using Debitum Network and consistently increasing our investment.

DN: I understand you have invested on other lending platforms. What advantages of Debitum Network do you see over other P2P (P2B) platforms?

INV: First of all, most of the platforms in the market focus on consumer lending. According to our research and our investment strategy, SME loans are safer and more attractive for use. Secondly, the product – the platform itself is one of the best in the market and we already saw screens of a new version of the platform – it will be even better. Thirdly, loans on the platform are really good quality. We have made our own research about current loan origination and the results speak for themselves.

DN: How do you select assets for investments?

INV: Currently we invest in almost all the loans as they are all quite short term and with a buyback guarantee.

DN: Do you prefer any industry? How do you diversify?

INV: We have a stake in almost every loan (consequently, in every industry) on the platform.

DN: What have been the returns?

INV: Currently we have a 9% average interest rate from all the loans we have invested in. Interest rates on the platform are rising and we will soon reach 10% average interest.

DN: Have there been any late repayments or defaults?

INV: The platform is great and we can clearly see all the loans which are late. There are some loans which are late – it’s normal in the lending business. The good thing is that we earn additional penalty interest from a late loan. After using the platform for more than 6 months, I can testify to the fact that we have had 0 defaults until now.

DN: Do you invest manually, or use an auto-invest feature?

INV: We invest manually.

DN: What do you think are the advantages of investing in short term loans over other investment options?

INV: Liquidity and possibility to have flexibility are always good in the investment world.

DN: Do you think that investments in Debitum Network are sustainable? Why?

INV: Definitely sustainable and they have a very bright future. There will always be a lot of SMEs and they will always need money. Banks’ financing is shrinking and players like Debitum Network will be game changers in SME financing world.

DN: What features do you wish Debitum Network to implement or how to improve our platform in the future?

INV: For us, as professional investors, more analytical tools would be great. Likewise, if SMEs would be able to apply for a loan directly on the platform, it would also be a great feature.

DN: Thank you for the interview. We wish you long lasting and even better results investing on our platform.

INV: Thank you.

Want to be an investor on Debitum Network platform?

Investors join our platform every day and earn attractive interest by investing in low-risk short term loans for SMEs. You can do the same and start making profits from day one. All the assets have a buyback guarantee, the minimum deposit is 50 Euros, minimum investment amount – 10 Euros. You can leave any time you want.

Disclaimer: Investments in financial products are subject to market risk and any investment should only be done with risk capital. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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Assets from Manufacturing industry on Debitum Network platform

25 January, 2019

5 min read

Assets from Manufacturing industry on Debitum Network platform

In our blog post, where we reviewed how our platform performed last year, we mentioned what percentage of assets were funded in specific industries. The most popular were Wholesale, Services, Retail, Manufacturing, Logistics, ITT, Construction. We want to share the chart with you again and then, stress why investors should pay more attention to the overlooked Manufacturing industry.

One can see that investors preferred Construction sector and neglected Manufacturing even though interest rates for the assets were not among the lowest. Only 16.5% of the assets in the industry were bought out. This represents investors’ choice, but by no means, it proves that the assets in the industry are worse than the assets in any other industry and we want to prove that they are safe and worth investing in.

Manufacturing assets have high credit scores

Manufacturing assets on our platform have some of the highest credit scores among the available industries. They range from B+ to B. It means, that according to our risk rating partner Scorify (a veteran expert in the field) the assets are the least risky investment options and could be the best investment choice for a conservative investor.

All the assets in the industry have a buyback guarantee

Extra safety is added to the assets in the industry by the buyback guarantee. A buyback guarantee means that if the borrower is late with repayment of the given asset by a specific number of days set by loan originator (in most cases it is 90 days, but it depends on the loan originator), the broker (loan originator) who issued the loan has to buy it back together with the outstanding principal and interest. Taking into account, that all the assets uploaded on Debitum Network platform are carefully handpicked by our partners loan originators, the likelihood of a default is very small and even if that happens, investors’ funds are protected under the buyback guarantee.

All the assets in the industry have an extra guarantee from owners

Not only brokers offer guarantees to protect investors’ funds, but also companies that borrow. The most typical guarantees that the companies may offer while taking a loan would be: personal guarantee (from 2-4 owners of the company), invoices for the goods sold, equipment (warehouse, machinery, cars, and etc.) to name a few.

Final buyers of the invoices are strong businesses

Companies that borrow and whose assets are uploaded on our platform usually offer their services to other companies. The latter are strong businesses with revenues exceeding 100 million Euros, huge customer line and over a decade of experience in business. In most cases, they are also regular customers of our loan originators, which proves that they are reliable business partners and will pay invoices.

Businesses that borrow and final payers of invoices are long term players in their respective fields

Borrowers in the industry of Manufacturing that have their loans uploaded on our platform have been in business from 10 to 25 years. Their revenues are steady, they have borrowed from our loan originators before, and have successfully repaid their debts. They are well-established players in their field and steady revenues diminish the chance that they will come short on their payments. The same is true about purchasers of invoices. You can find that on your own by reading Under Asset description, which each asset page has.

You can find more financial info about each asset and the borrower in Asset Page and Borrower and Under Asset

If you are a numbers person and want to find out more about specific investment or the company that borrows, what it does, its’ financial statement, you should press ‘View’ button and ‘Asset Detail View’ window will pop up. Press ‘Borrower & under asset details’ and you will find the purpose for taking a loan, what sector the borrowing company is in, when it is registered, more description about the company (some numbers, experience in the field) and Under Asset description (usually info about the purchaser about the final buyer of the invoices). You may find even more useful info and benefits (not discussed above) of investing in that specific asset.

More info about the financial situation of the borrower might be found in the attached documents

In most cases, there will be a financial summary attached (this depends on the loan originator), which would disclose financial info about the borrower and the purchaser of invoices, so an investor may know how reliable the companies are. If you understand the numbers this page will be really helpful for you to get a better grasp of the financial well being of the borrower and his customers.

Our offer to invest in the selected assets of the Manufacturing industry

We want to offer investors on our platform to consider adding some of the assets from the Manufacturing industry to their portfolios. You can do it manually or use an auto-invest feature. Below are top 5 assets from the industry.