COMPEON study SME financing: where companies are giving away potential – the biggest mistakes, the best opportunities

79.5 percent of SMEs generally want more transparency when it comes to financing issues.

The classic relationship with only one house bank can hardly do this – and yet many companies still rely on only one partner when it comes to financing issues. For the study "Mittelstandsfinanzierung: Wo Unternehmen Potenzial verschenken – die grobten Fehler, die besten Chancen" COMPEON, the leading product- and provider-independent full-service provider for SME financing in Germany, surveyed around 300 SME decision-makers from various industries on their respective financing situation and current challenges in this area.

Companies are expanding their scope of financing

In recent years, the demands on banks have increased considerably on a wide variety of levels. Pressure is mounting on financial institutions due to new regulations and the ongoing low-interest phase. Small and midsize companies in particular are feeling the impact. Although the field of alternative financing partners is expanding and solutions beyond the classic relationship with the house bank are emerging, 72 percent of companies still rely on one, or at most two, bank connections.

"The numbers are surprising in that 79.5 percent of companies would like to see more transparency. This shows that many medium-sized companies have still not arrived in the age of digitization when it comes to financing. "

Dr. Nico Peters,
Managing Director and Co-Founder of COMPEON GmbH

Reduce financing costs through transparency

However, lengthy comparisons also come at a high cost to companies and a time commitment that should not be underestimated. 75.6 percent of respondents therefore rely on the offer of a single or a few providers when looking for suitable financing. 28.3 percent of businesses even choose the first offer they get without looking at comparison offers for potentially better deals.

And it is by no means just about the interest rate, but also about collateral, term and own funds. Opportunity costs are correspondingly high, although market transparency could be achieved by comparing providers. Companies with three or more bank relationships pay an average of 20 percent less for financing than those that rely on fewer financing partners. Nevertheless, only 28 percent of SMEs rely on this option and maintain relationships with three or more banking partners.

Use of digital platforms

Digital platforms in SME financing

One way to quickly and efficiently generate transparency and the best possible financing offers is through digital platforms. 80 percent of the companies can imagine using a digital platform to receive suitable and individual offers for financing. On the financing portal COMPEON can be inquired already today over 250 financing institutes and compared so. Personal advice from experienced financial experts helps to identify the most attractive offer and thus obtain the best possible conditions.

"The goal of digital platforms should be to support, advise and thus provide the most effective solution towards financing the business," explains Nico Peters. Keeping dependencies on individual financing partners as low as possible should definitely be the goal. "This is not just about the technological aspect, but more importantly about the fact that it means they are leaving money on the street or putting up with unnecessary impositions." Market transparency benefits companies. Digital platforms can provide this comparability.