Internet platform Debitos: Earning money with bad loans

About Debitos banks and companies can sell bad debts. In order for the Internet, the platform is a junkyard for bad loans – with rapid growth.

Scheitern can also be a chance. This experience has made Timur Peters. Now he is managing director and shareholder of a young Internet company, which enjoys a unique position despite the current great wave of start-ups in the financial technology (Fintech). Unflattering to Debitos can be described as a junkyard for impaired exposures. But this junkyard is growing rapidly: Peters has created a trading platform for non-performing loans on the Internet.

The idea he came years ago when he worked for a loan provider in Rotterdam, provides the loan directly, without an intermediary bank. Peters had a claim plus court verdict against a German entrepreneur but not paid. Trying the package on eBay to auction failed. The trading platform refused. While Peters looked at his demand nothing, but he was richer by a business idea. Now he appears confident and even wants to expand abroad. With the development of the platform of demands, he had started in the year of 2010. Which an intensive exchange with the German Federal Financial Supervisory Authority (BaFin) and the clarification of data protection issues had preceded.

Banks separate problem loans

Now Peters can report a positive response to its platform. “A total of more than 1400 sellers of outstanding claims are active. There are also about 350 registered investors. “The auctioned volume of receivables exceeded according to him recently the mark of 1.4 billion euros. According to Peters currently, sell 20 banks and 300 medium business demands. Investors purchase the assets at a discount to the face value and hope from the disposal of collateral or a higher insolvency of winning. These refer to investment banks, funds, debt collection agencies and lawyers who work for special asset managers. Every tenth comes from abroad, mainly from the English-speaking world.

Business with bad loans had reached ten years ago a lot of interest when American financial investors such as Lone Star and Cerberus by German banks billions of packets to problem loans had bought. One acquires these at a discount, ie paying for the call of one euro, for example, only 0.20 euros. If the security is utilized such as the property, a profit can jump out. Banks separate from these problem loans because they overwhelmed the processing (workout) by difficult economic times, with an accumulation of loan defaults.

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But also medium-sized companies, including many suppliers are keen to get rid of the bad loans quickly. So that they could bridge liquidity shortages, says Peters. The companies are other solutions too time-consuming and too expensive. “High outstanding tie up capital and balance sheet burden,” Peters adds. Otherwise, the company would have to invest in a Legal Department with extra staff and fixed costs. The debt collection returns would only offset often after many years. Lawyers turn is connected to front costs and the output also uncertain, says Peters.

The “junk” discards return

He cites a case study: A supplier of Prokon was threatened in its existence by the insolvency of the wind farm operator. He had an open debt of 11.3 million euros. On the Debitos platform in March 2015, the minimum price of 24.34 percent or 2.75 million euros had been called. At the end of the suppliers was 3.8 million euros. Currently, insolvency claims are traded by DIY practitioners of KirchMedia, the drugstore chain Schlecker or fuel producer German Pellets. According to Peters, there are on Debitos investors who want to pay more than 30 percent of the initial value for German pellets receivables.

That the “junk” yields a return that shows the bankruptcy of the current dealer Teldafax. In the spring of 2014, it looked as if in debt something would reinzuholen of the 650 million euro barely. According to worthless claims against Teldafax were. But now it is likely that half of the debt is serviced. Because the liquidator has collected 214.4 million plus 40 million euros in interest. He announced also trying to collect another 100 million euros.

Debtors earned loud Peters per transaction commission 1-9 percent of sales. These fees usually paid to the seller of the receivables. Peters believes it has a very large market. Every year 225 billion was in Germany at companies and banks 74 billion euros. His platform he holds in Europe unique. “Yes, we are thinking about expanding abroad too,” says Peters, calling Spain and the UK as interesting markets.