October, a leading European online lender, notes that it was launched after the global financial crisis of 2008-2009 with the goal of providing more financing options or alternatives to European SMEs.
The October team wrote in a blog post published on July 1, 2020:
“We didn’t think we would go through a pandemic but we knew the future would be digital…we have said this many times but, today more than ever, October [aims to be] part of the solution.”
The Fintech firm confirmed that it has now closed the financing for its 100th Spanish company.
Although this seems like a relatively small number, October says it’s grown a lot in these past three years during which it reached its 100th Spanish company.
October, which was previously known as Lendix, branched out into Spain knowing that they were entering “a highly bancarized market.”
“We knew that it would be a challenge to change the habits of borrowers. When we began to operate, we explained to our clients that we were a crowdlending platform, where 22,000 investors would lend to their projects, but at first they were reluctant.”
October said they had to gradually build trust by being as transparent as possible when offering services to customers and dealing with other stakeholders. While establishing operations in Spain, the Fintech lender had to explain to people that they did not have to physically go to their business offices or bring a lot of paperwork to analyze their projects.
The company also noted that they are able to make requests in minutes directly via the internet, which many couldn’t believe at first. Several borrowers reportedly asked the October to meet them in person.
October claims that it has seen a noticeable change in the behavior of Spanish firms, which may be due to fundamental changes in the market. These mainly include several large mergers and acquisitions, including that of Banco Popular, the digitization of the financial industry led by Fintechs and the socioeconomic effects of the global COVID-19 outbreak.
The October team says that business owners are now aware of the different strengths and advantages of diversifying their income and investment sources “beyond their traditional banks.”
Entrepreneurs in Spain are now more confident about advertising their projects online, and view it as an opportunity to further expand their operations in an efficient manner.
October’s blog post notes:
“If you can book a hotel with your phone, why can’t you finance your business in a few clicks?”
Business owners are now increasingly looking for a “digital remote process,” the October team reveals. The company said that it will continue to work with SMEs.
“In the midst of this pandemic crisis, … private investors want to participate in the real economy; institutional investors are [interested] in … diversifying their asset allocation; financial institutions want to truly digitize their credit process and offer a positive customer experience; supranational, national and regional institutions are launching programs to support SMEs in the crisis.”
In Spain, October is working cooperatively with Bankia (a Spanish bank with a universal banking business model) and Liberbank (another established Spanish bank). The company said it plans to work with others as well in order to form strategic partnerships with key players in order to help SMEs.