8LENDS

About

Rapid Finance JSC is a registered company in Bulgaria, located at: Sofia, Krasno Selo district, Borovo St. 52, Entrance G, Floor 1. The share capital amounts to 1,050,000 BGN (approximately 536,000 EUR) and is fully paid. The company operates under the Bulgarian Credit Institutions Act and is registered in the Bulgarian National Bank (license BGR00501, Order No. BNB-123689 dated 02.10.2024).

The company specializes in providing microloans to the following categories of clients:

Individuals — microloans for personal needs.
Legal entities — microloans for businesses.
Legal entities with factoring — financing secured by sale and purchase/delivery contracts; financing of receivables confirmed by issued Invoices.

The company actively utilizes its website to offer services to clients, ensuring a convenient and accessible interaction process.

About the Owner

The company is owned by Dimitar Velislavov Chohadzhiev, a prominent entrepreneur with extensive experience in both public administration and private business. Previously, he served as Deputy Minister of Economy, Energy, and Tourism of Bulgaria, a role that provided him with deep insights into regulatory frameworks and economic development.

After his tenure in government, Mr. Chohadzhiev shifted focus to the private sector, successfully managing and owning several businesses in Bulgaria. His portfolio includes leadership roles in financial services, project management, and leasing companies. His strategic approach combines knowledge of public policies with a hands-on understanding of market dynamics.

Interest Rates and Loan Terms

Rapid Finance JSC offers microloans tailored to the specific needs of its clients, with clearly defined interest rates and repayment terms for different categories of borrowers:

For Individuals:
Interest rate: 0,6-0,7% per day, equivalent to an annual percentage rate (APR) of 220-250%.
Loan term: 15 to 45 days with the possibility of extensions by 7, 14, or 30 days. These short-term durations are intentionally chosen to offer greater flexibility to clients, distinguishing Rapid Finance JSC from competitors who often have rigid repayment schedules.
Loan amounts: 300 to 1000 BGN (approximately150 to 500 EUR).. These loan sizes represent a strategic hypothesis, targeting clients with smaller immediate needs. Competitors in the market tend to focus on larger minimum loan amounts, leaving this segment underserved.
Key features: Competitive terms compared to market alternatives in terms of loan duration and amounts, flexibility towards customers and fast decision-making process, comprehensive and sophisticated risk analysis.
Key requirements towards Customers: proof of residence and registered home address, clear credit history, absence of offences and criminal records, confirmed permanent income, presence of pledges/collaterals and other acceptable guarantees to back up a desired loan.

For Legal Entities (without factoring):
Interest rate: 3-3,5 % per month, equivalent to an annual percentage rate (APR) of 36-42 %.
Loan term: Minimum 3 months, maximum 12 months, adjustable in 1-month increments.
Loan amounts: 10,000 to 50,000 BGN (approximately 5,150 to 25,600 EUR), with an option for increments/increase of the loan amount up to 20%.
Early repayment option with minimum contractual interests’ coverage occurred on the Loan Amount.
Key feature: Flat interest rate providing transparency and predictability for business clients, flexibility and customized approach towards each individual business customer.
Key requirements towards Business Customers: proper KYB process, verification of beneficial owners and management, brief valuation of ongoing business along with business plan for further development, sustainability checks, clear credit history of the Applicant, analysis of financial statements and risk assessment, absence of court litigations and ongoing tax debts, presence of pledges/collaterals and other acceptable guaranties to back up a desired loan.

For Legal Entities (with factoring):
Interest rate: 1,25-1,5% per month, equivalent to an annual percentage rate (APR) of 15-18%.
Loan term: Factoring with regress rights (in case of non-payment by the customer, the financial claim is redirected to the Invoice issuer). Financing of receivables confirmed by issued and accepted Invoices

Details

Portfolio Composition:

The loan issuance balance is projected to be 25% for individuals and 75% for legal entities. Within the corporate loan category, a significant portion is expected to involve factoring agreements:

Factoring loans: 60%
Standard business loans: 40%

Default Rates:

Based on conservative estimates, the average portfolio default rates are:

Individuals: 18%
Legal entities: 12%

Revenue and Profitability:

Using the interest rates, the projected income from issued loans is as follows:

Individuals: With an annualized APR of 220-250%, the gross interest revenue from individual loans is expected to contribute significantly, despite the higher default rate.
Legal entities: At APRs of 36-42% (standard loans) and 15-18% (factoring loans), corporate loans are expected to generate steady and predictable income due to their lower default rates.

Estimated Gross Revenue for Q1 2025:

From individuals: Approximately 75,000 EUR.
From legal entities: Approximately 420,000 EUR, with 250,000 EUR from factoring and 170,000 EUR from standard loans.

Adjustments and Rebalancing:

After evaluating the portfolio's performance and accumulated data, Rapid Finance JSC plans to reassess its strategy.

This may include:

Adjusting marketing efforts to target low-risk segments more effectively.
Increasing or decreasing the proportion of loans to individuals and businesses based on default trends.

Types of Loans and Annual Rates:

Loan for Individual Clients:
Amount: 26,400 EUR
Annual rate for investors: 18,5%
Purpose: To issue short-term microloans to pre-approved individuals for personal needs such as emergency expenses or urgent purchases.
Pre-approved Pool: Includes clients with verified needs such as medical expenses or utility payments, ensuring high demand and repayment potential.

Loan for Corporate Clients (Standard):
Amount: 68,000 EUR
Annual rate for investors: 19,5%
Purpose: To provide working capital and short-term financing for SMEs.
Pre-approved Pool: Includes businesses requiring funds for inventory purchases, equipment upgrades, or cash flow management.

Loan for Corporate Clients (Factoring):
Amount: 52,000 EUR
Annual rate for investors: 19%
Purpose: To finance pre-approved factoring agreements, helping businesses unlock cash flow tied to invoices.
Pre-approved Pool: Includes corporate clients with pending invoice payments, secured by existing contracts.

Repayment Terms

Rapid Finance JSC employs a structured repayment model to ensure transparency and predictability for investors. For each loan tranche:

Interest Payments: Investors receive monthly interest payments
Principal Repayment: The loan principal (full amount) is repaid in a single payment at the end of the loan period.

Current Collateral Situation:

Rapid Finance JSC is a new entrant in the microfinance market and, as such, does not yet possess significant physical assets or collateral guarantees. The company operates primarily with its capital base and financial resources. Despite this, the company’s fully paid share capital of 1,050,000 BGN (approximately 536,000 EUR) provides a solid foundation and assurance for all financial obligations.

Collateral as Security:

While the company does not offer physical assets as collateral, its share capital is more than sufficient to cover its current and planned obligations, including investor returns and operational expenses. This robust financial base ensures that investors’ interests are safeguarded.

Conclusion:

Although Rapid Finance JSC is in the early stages of its development and lacks significant collateral assets, the size of its share capital provides substantial security for its financial activities. This capital base not only supports the company’s operations but also instills confidence among investors and partners. As the company grows, it may consider expanding its collateral offerings to further enhance financial stability and investor trust.

Borrower info

Rapid Finance

Sofia, 14 Tsar Osvoboditel Blvd., Floors 5–6, Sredets District, 1000

Rapid Finance AD is a Bulgarian joint‑stock company (AD) headquartered at 14 Tsar Osvoboditel Blvd., Floors 5–6, Sredets District, Sofia, Bulgaria and registered in the BNB Public Register of Financial Institutions (code BGR00501). As of the latest corporate update, Rapid’s statutory capital is BGN 3,000,000 (approximately EUR 1,533,876), fully paid in.

Reg No.207852400

Market description & size

Market Size in Bulgaria:

The microfinance sector in Bulgaria is experiencing steady growth, driven by the increasing demand for short-term financing solutions. The total market size for microloans is estimated at 1.2 billion BGN (approximately 613 million EUR) annually, with individual borrowers accounting for approximately 40% and corporate clients making up the remaining 60%. The growing acceptance of digital financial services further supports the expansion of this sector.

Key Competitors

The microfinance market in Bulgaria includes several established players offering similar services to Rapid Finance JSC, including:

Credissimo: A leader in the individual microloan segment, known for its digital-first approach and larger loan sizes starting at 100-500 BGN.
Ferratum Bulgaria: Focuses on small personal loans with flexible repayment terms but higher interest rates compared to Rapid Finance JSC.
Viva Credit: Specializes in corporate financing with minimum loans starting at 10,000 BGN, leaving a gap in serving smaller businesses.
Easy Credit: Caters to middle-income individuals, offering doorstep loan services with a focus on rural areas.
Vivus.bg: A digital-first platform catering to individuals seeking short-term microloans with streamlined application processes.
Credirect.bg: Offers a broad range of financial services, including loans for individuals and businesses, positioning itself as a versatile competitor.

Competitive Advantages of Rapid Finance JSC:

Unique Market Positioning: By offering smaller loan amounts (starting at 40 BGN), Rapid Finance JSC fills a critical gap left by competitors, targeting individuals and businesses with immediate but modest financial needs.
Flexible Terms: Loan terms tailored to provide maximum flexibility, such as short durations and extension options for individuals, distinguish the company from its more rigid competitors.
Focus on SMEs: Unlike competitors who primarily target larger businesses, Rapid Finance JSC emphasizes supporting smaller enterprises with accessible financing options.
Digital Accessibility: The company’s user-friendly online platform enables fast and convenient loan applications, appealing to tech-savvy clients.

Challenges:

Brand Recognition: As a new entrant, Rapid Finance JSC must invest in marketing to build awareness and trust among potential clients.
Regulatory Environment: Compliance with Bulgaria’s financial regulations poses challenges, especially for innovative financial products.
Competitive Pricing: The company must carefully manage its interest rates to remain competitive while ensuring profitability.

Consumer Loans

Repayment schedule