Most medium-sized companies still rely on their house bank for financing issues.

The use of online loan platforms, through which financing offers from various providers can be obtained, is gaining in importance, but remains the exception, as a study by the state development bank KfW has shown, which is available exclusively to the FAZ.

Accordingly, in the survey of 15,000 medium-sized companies that was carried out regularly last year, 9 percent of the respondents stated that they wanted to consider such platforms as an alternative financing option.

Only 2 percent said they "safely intended" to use it. 

Tim Kanning

Editor in business.

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In the two years before the 2018 and 2019 surveys, 77,000 small and medium-sized companies had reportedly taken out loans totaling EUR 3.44 billion via the new platforms.

What sounds like a lot in absolute numbers, corresponds to the manageable share of 2 percent of the entire market for medium-sized investment loans, according to the KfW authors.

The proportion becomes even smaller if you add working capital loans, the total volume of which is difficult to define, emphasize the study authors. 

Fast and unbureaucratic 

Obviously, however, many medium-sized companies use the platforms primarily to borrow smaller sums quickly and unbureaucratically. According to the KfW authors, this suggests that they use it to finance working capital in the short term. With regard to the loan amounts, the promotional bankers note that comparatively small amounts are being raised via the platforms. The average financing amount in this period was 58,000 euros, but half of all financings did not exceed 30,000 euros (median value). According to the KfW SME Panel, on the other hand, the average volume of new bank loans taken out for investment financing was 167,000 euros. 

The advantages and disadvantages of digital providers compared to traditional house bank financing are clearly distributed according to the companies: The companies cite the speed to the financing approval and the low application effort as advantages of the loan platforms.

They rate the lack of personal availability as a disadvantage.

According to the authors of the study, this shows once again the enormous ties that small and medium-sized enterprises have with often long-term banking relationships, which are not infrequently paired with personal relationships with bank employees.

Trust in the financing partner is important to many of the small and medium-sized companies.

Effects of the corona crisis

However, the KfW authors also emphasize that the corona crisis could have significantly increased the importance of the credit platforms in the past year and a half. After all, many bank branches were temporarily closed because of the pandemic, so that even traditional entrepreneurs had to switch more to digital communication channels. Providers of digital financial services such as online loan platforms could benefit from this development in the future, according to the study.