The potential of turnover-based financing to potentially crush small and medium-sized enterprises (SMEs) is a matter of discussion.
In the face of challenging lending conditions for Small and Medium Enterprises (SMEs) in Germany, a new financing model is gaining traction. Revenue-based financing (RBF), offered by specialist firm Liberis, is proving to be an effective alternative for SMEs seeking flexible funding solutions.
Liberis, a pioneer in embedded finance, has been operating in Germany since July last year, partnering with Nexi to provide financing to over 120,000 SMEs. The company does not use Open Banking data for credit assessment, instead relying on anonymized transaction history provided by partners.
The advantage of RBF lies in its flexible repayment structure, linked to a company's revenue rather than fixed schedules. This model suits SMEs who may not qualify for traditional loans due to lack of collateral or inconsistent profits. With RBF, companies can choose to repay the loan as a percentage of their revenue, which can help during slow sales months.
Liberis offers loans ranging from €2,800 to €500,000, with most customers opting for a repayment rate of typically 10-20% of revenue. The money is usually with customers within eight hours, and always within 48 hours, assuming no delays on the customer's side or additional evidence is required.
The company's partnerships with digital platforms and fintechs enable SMEs to access capital quickly for growth activities such as hiring, marketing, or inventory expansion. These embedded finance solutions have demonstrated significant positive impacts, with platforms like Shopify Capital allowing merchants to boost sales by 36% over six months post-funding.
SMEs in Germany also benefit from broader alternative financing and guarantee instruments supported by EU public funds, which have been effective in mobilizing larger lending volumes through guarantees and loans to support innovation and working capital. These instruments complement RBF by diversifying the range of accessible funding.
Hanna Sommer, Managing Director at British fintech Liberis, believes this is an opportunity to enter the German market with revenue-based financing. A KfW study shows that the proportion of SMEs seeking loans fell to under 20% in Q1 2025, a decrease from the previous year. Service providers and construction companies are particularly affected by the decrease in SME loan applications.
André Lichner, CEO of Fincompare, is confident that the proportion of revenue-based financing will increase in the SME financing market. Liberis has formed a partnership with Fincompare, enabling it to offer financing to over 25,000 businesses in Germany.
While no detailed Germany-specific case study of Liberis was found, these insights collectively indicate that RBF, especially through embedded finance partnerships as offered by firms like Liberis, is an effective financing instrument for SMEs in Germany in the current financial landscape.
Liberis is also collaborating with eBay to provide sellers on the marketplace access to RBF. No payment defaults have been reported so far by Liberis in Germany. However, the article does not provide information about the number of payment defaults in most countries or the percentage of customers who have applied for follow-up financing in other countries.
In summary, RBF offers flexible financing aligned to revenue, suitable for SMEs with fluctuating cash flow or lacking collateral. Embedded finance partnerships, such as those Liberis forms with platforms, result in measurable revenue growth and higher sales by enabling easier and faster capital access. SMEs in Germany still seek alternative financing solutions like RBF due to limited traditional loan accessibility, and EU-backed financial instruments and guarantees further support SME financing alongside RBF models.
Financial institutions and technology have played a crucial role in providing alternative financing options for Small and Medium Enterprises (SMEs) in Germany. The revenue-based financing (RBF) model offered by Liberis, a pioneer in embedded finance, has been effectively addressing the challenges faced by SMEs seeking flexible funding solutions, particularly those who do not qualify for traditional loans. Furthermore, the company's partnerships with digital platforms and fintechs are expanding access to capital for growth activities like hiring, marketing, or inventory expansion, thereby positively impacting the business landscape.
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