SPVs in Lending: Why Banks are Increasingly Investing in Portfolios

SPV structures are back on the agenda. Rising capital requirements and growing demand for alternative credit - factoring, leasing, digital trade finance - are pushing more banks and lenders toward structured refinancing. The strategic case is solid but the operational reality is often not.

Problems rarely show up in the legal structure but you see them in the data. Loan-level information arriving in inconsistent formats, validation processes that aren't standardized, reconciliation between servicer data and actual cash flows done manually or not at all. And backup servicing is a particular weak spot. If a servicer fails or delivers incomplete data, there's often no tested fallback in place. For a structure that's supposed to be resilient by design this is a big problem.

What actually makes SPV setups work at scale comes down to a few things: clear role definitions between all parties, standardized data structures, automated covenant and cashflow monitoring, and backup servicing paths that have genuinely been tested.

Our CEO Nicolas Kipp wrote about this in detail for Der Bank Blog. The full article is in German.

Read it here.