Three experienced financiers and an adviser discuss the current state of SME finance. A conversation about the changing role of banks, the rise of alternative forms of financing, and the challenges and opportunities for entrepreneurs. 'Don't just look at the price, look at the financial construction.'
The non-bank finance providers who joined for a conversation about SME finance remarkably often agree. And they are optimistic. Entrepreneurs want to invest again, money is plentiful and the economic outlook is good. Not only for entrepreneurs, but also for themselves. Alternative financiers have become indispensable to SMEs, they believe.
All four have more than earned their spurs in SME financing. Bart Vemer is one of the founders of Voordegroei, a financing company focused on SMEs. Voordegroei finances SMEs with investment funds and mandates such as Voordeadviseur, a fund that focuses specifically on mergers and acquisitions of insurance portfolios.
Mogelijk Vastgoedfinancieringen 'brings entrepreneurs and investors together with the real estate as solid collateral,' says board member Dirk Jan van der Hoeden. 'For the entrepreneur, it's nice that it goes fast, while the investor has security. We link lenders and borrowers directly, so speed and efficiency are key. The nearly two billion euros in financing we have provided underscores the success.'
Crowdfunding platform Collin Crowdfund has now raised over 800 million euros in funding and is growing by 30 to 40 percent annually. Chartered accountant Bas Denissen, involved with the platform since 2015, expects to reach the one billion euro mark in the spring of 2025.
Credion, founded 25 years ago by Carlo van der Weg, is a nationwide debt advisor network with now 50 branches and 100 advisers. Credion helps entrepreneurs find the best financing solution, whether it's an acquisition, the purchase of business premises or working capital. Van der Weg has international ambitions: 'We started a partnership in Belgium last year. We may soon start in Germany.'
The optimism of the four discussion participants is striking in light of the turmoil in the world. After all, there is still war in Ukraine and the Middle East, and at the time of the conversation, the U.S. presidential elections have not yet taken place. But Dutch SME entrepreneurs are keeping a cool head, Vemer believes. 'It may sound crazy, but I think entrepreneurs have become accustomed to the fact that there are wars in the world. Besides, as an entrepreneur you are always exposed to risks, that's part of it.'
For the biggest risks, Denissen says we don't need to look abroad. "The labor shortage is a bigger threat. Everyone is looking for people, which can hinder business growth. With the current aging population, this will remain a problem for the next 10 to 20 years.' Van der Hoeden: "And there is also uncertainty about Dutch politics. We don't know what politics will mean for SMEs in the coming years, we're not even sure which cabinet will be in place a year from now.'
In the face of uncertainty, stabilized interest rates provide a good investment climate, notes Van der Weg. "We see a lot of demand for financing, with 40 percent of applications going to owner-occupied real estate, 12 percent to commercial real estate and 15 percent of applications are acquisition-related. The rest of the cases involve entrepreneurs looking for working capital. Almost all financing does have a real estate component. The market for rented residential real estate has taken a big hit due to regulations, but we see entrepreneurs turning to other forms of real estate financing. For example, more commercial properties are now being purchased.'
You read an excerpt from the roundtable interview with four finance experts and can be read in its entirety in the Brookz 500. Wondering what opportunities and threats lie ahead for entrepreneurs in the acquisition market in 2025? Then you can order the 2025 edition at the click of a button.
