Debitum Network is a Peer-to-Business/Business-to-Business lending platform founded in 2018, and operating from Riga, Latvia. The platform is meant to provide funds for small enterprises allowing investors globally to invest in short-term loans directly bypassing traditional intermediaries such as banks or investment funds. Unlike most alternative finance platforms, Debitum Network focuses solely on business loans. Platform is really friendly for new users and has amazing tutorial for new registrants.
Debitum Loan rates
More than 400 assets (loans) have been uploaded on Debitum Network platform and the average annual interest rate for them is 9.75%. Interest rates of loans vary from 9% to 12%, and credit scores from A+ to F (credit scores show the probability of default of a company during the next 12 months. Debitum Network uses a unified scale of credit scores provided by different risk assessors). Thus, investors with different investing styles and risk tolerance can join the platform and find an investment(s) that suit them. Choose the credit score range, interest rate range and the platform will filter all the assets under the category.
Debitum Buyback guarantee
All the loan originators that issue loans which are placed on Debitum Network platform have a buyback guarantee. This means that if a particular loan is delayed by more than 90 days (actual term depends on the loan originator), then the broker (loan originator) is obligated to buy back the issued loan that is late with the outstanding principal and interest.
If the borrower is late with the repayments, the loan becomes ‘late’. Investors on the platform have no need to worry about that. In fact, on Debitum, investors can benefit from late loans. Each asset has a penalty rate (ranges from 2% to 18%), which means that if the borrower is late with the repayments by more than 15 days, he will not only have to pay outstanding principal and interest but also the penalty rate for that specific loan. It means, that late loans can increase average returns without raising the risk to investments.
Important fact: Since the launch 9 months ago, there hasn’t been a single default on Debitum Network platform! This is an outstanding result that cannot be outmatched by any other P2P or P2B platform.
Other guarantees: investments are backed by collateral, invoices for goods sold, and personal guarantees.
Types of loans in Debitum
Most assets are short-term
Debitum Network advantage over most other similar lending platforms is that the loans are short-term, which enables fast turnover of investors’ funds and a possibility to earn compound interest by reinvesting funds after repayment.
This is a big plus for the platform. A lot of similar platforms have loans that are 1 year and longer. One has to be very picky to create a portfolio with performing loans. If some loans default (on those platforms), this may have a serious impact on investors’ portfolios. Some part of investors’ funds is frozen and cannot generate income. As a result, the advertised returns of 15% or more turn out to be much lower. Thus, short-term loans on Debitum Network is a real advantage. As of now, the real interest rate paid to investors (at Debitum Network) stands at 9.75%.
Business loans
The focus of Debitum Network is solely on business and there isn’t a single consumer loan on their platform. Currently, the loans fall into the categories: business, invoice financing, and trade financing.
From my perspective, investing in business loans carries more advantages than investing in consumer loans or real estate loans. Why? Individuals do not have cash flows, the pledged assets may not be enough to cover the loan in case of default. A lot of defaults in consumer loans may cause the loan originator to go broke and in that case, a buyback guarantee, which most of the P2P platforms offer will have no use for the investors.
The same is true with the platforms that offer real estate loans. If a deal goes south, the invested capital gets frozen. An asset backed by a real estate and with a maturity of 2 years may cause an investor to lose a big chunk of his money, to say nothing of the promised interest. Who can guarantee that the pledged real estate can be sold in the first place, and if sold, will it be enough to cover the outstanding principal and interest?
Approved and used by institutional investors
The platform is open for both individual and institutional investors. Around 2,000 investors chose Debitum Network platform. Institutional investors prefer the platform due to the attractive risk and return ratio, short-term loans (which provides more flexibility), and business loans (they are safer than consumer loans).
Duration and sizes
Loan terms: from 1 month to 60 months.
Average asset term – 42 days*
Average asset size – 9,498 euros.
*Currently, the platform has significant invoice loan exposure
Other important statistics
The number of registered investors – 2008.
Total loan amount – 4.08 million euros.
Principal repaid to investors – 2.03 million euros.
Interest paid to investors – 17,083 euros.
4 loan originators:
Factris (Netherlands/Lithuania) – invoice financing loans.
Chain Finance (Lithuania) – business loans.
TradeBacking (Latvia) – trade financing.
Aforti Finance (Poland) – business loans.
The statistics regarding the platform and the numbers clearly point to an upward trend, which proves that users trust Debitum Network. The turnover of invested funds have been going up, average interest rates have risen and they have managed to add 3 loan originators since the launch (they started with just 1 Factris (formerly known as Debifo). The company shows stable growth and this paints a bright picture for the future of the company.
Deposits and investment minimum
The minimum deposit amount is 50 euros, while the minimum investment amount is just 10 euros. There is no limit as to how much you can invest.
Accepted currencies
EUR, USD, GBP
Users can deposit flexible amounts on our platform, the minimum being 50 Euros from SEPA accounts (deposits can be done in British Pounds (GBP) from local accounts, and US Dollars (USD) from US-based accounts). All investments in assets are transacted in Euro currency.
However, users whose national currency is not EUR/GBP/USD can also invest, but the expenses for bank transfer can be costly.
Secondary market
At the moment, Debitum Network does not have a secondary market. This is a bit of a minus as the investors cannot sell their loans in case they want to leave the market before a specific loan matures. They should work more on other ways to improve liquidity, and for the time being short terms of loans is the only way to achieve that.
However, the team is planning to create a secondary market sometime in the near future. The actual deadline depends on the growth of assets on the platform. The more loan originators come, the bigger the chances to speed up the process.
Auto-invest feature
Auto-invest feature was implemented at the end of 2018. It is a great tool, taking into account that the loans are short term and the moment repayment is made and funds are back into investor’s account it can immediately be reinvested by the auto-invest, according to the plan the user has chosen.
As the number of assets on the platform is still quite small, the auto-invest feature comes in very handy as it helps me to stay ahead of the crowd. When a new asset is uploaded on the platform and if meets your predefined settings the auto-invest feature immediately invests in it. Thus, you never miss an opportunity to invest in the assets that you like, which might be difficult if you tried to invest manually.
Debitum Referral program and cashback campaigns
When you register on the platform, you can get bonuses and cash back by referring friends. Currently, you and your referral can get 10 euros cash back (when your referral invests 250 euros into the assets on the platform), which you can invest or withdraw without any restrictions.
The company regularly organizes cashback campaigns. For example, users can earn a specific percentage of cashback through investments made within a specific time frame of the promotional campaign. Or, the investors can earn straight up cash while investing bigger amounts. For instance, investment of 500 euros will earn you 25 euros, provided you met the conditions set for that specific campaign.
Debitum Fees
The platform does not have any fees and everyone is free to join.
Debitum Deposits and withdrawals
Bank transfer: Euros (SEPA), GBP (local UK accounts), (USD (Local US accounts).
Debitum Advantages and disadvantages
Advantages
- New user friendly
- Buyback guarantee
- Not a single default since the launch
- Borrowers are strong companies who have borrowed and repaid the loans before
- Reserve fund
- Auto-invest feature
- Regular cashback campaigns
- Easy to use platform
- Major currencies: EUR, USD, GBP accepted
Disadvantages
- No secondary market
- Too few assets
- Young company
Verdict:
Apart from a few minor disadvantages, Debitum Network platform looks promising and an attractive option for investments. Not a single bad loan since the launch proves the assets on the platform are some of the safest in the industry to invest in. Short-term loans allow investors to generate a fast turnover of their funds and the usage of the auto-invest feature enables one to earn compound interest. It is worthwhile choosing the platform for investing!
Register in Debitum Network now!