The Coordination Tax in Credit Line Management
By Lennart Wendt & Julia Schimanietz, Co-Founder Lelia
European fintech lenders have revolutionised how borrowers experience credit. But behind the scenes, the operational reality is stuck in 2010: fragmented spreadsheets, manual reconciliation, parallel versions of truth. This coordination tax compounds silently until it becomes unsustainable. The opportunity now lies in operational infrastructure: the connective tissue between originators and investors. The next competitive advantage will not come from origination. It will come from workflow.
From conversations with over one hundred fintech lenders, their investors, and the service providers connecting them, we observe that European fintech lending has a blind spot. The industry has invested heavily in what borrowers see: seamless applications, instant underwriting decisions, digital disbursement. Yet behind these polished interfaces, a different reality persists. The operational infrastructure connecting originators to their investors remains fragmented, manual, and surprisingly primitive.
This is not a minor inefficiency. It is a structural barrier to scale. Every originator managing a warehouse facility or credit line pays a coordination tax: the cumulative cost of reconciling data in spreadsheets, chasing confirmations, reformatting reports, and maintaining parallel versions of truth across multiple stakeholders. The tax is invisible in any single transaction but compounds relentlessly as portfolios grow.
The Hidden Complexity
Credit lines are not static financing arrangements. They are living operational relationships involving originators, investors, servicers, calculation agents, trustees, and auditors. Each party requires different information, in different formats, on different timelines. Each maintains their own records. Each has their own systems.
The result is predictable: no single source of truth exists. Portfolio data lives in originator systems. Facility terms live in investor spreadsheets. Compliance records live in servicer databases. Connecting these requires constant manual effort: emails requesting updates, documents reformatted for each recipient, hours spent reconciling figures that should match but do not.
The tools have not kept pace with the stakes. A literature review examining 35 years of research found that 94% of spreadsheets in active use contain errors. Mercifully, most do not replicate JPMorgan’s 2012 experience, where a modeller’s copy and paste strategy contributed to $6.2 billion in losses. But in credit line management, even modest errors cascade: a misaligned eligibility calculation delays a drawdown, a formatting discrepancy triggers a covenant query, a version mismatch creates weeks of reconciliation.
One facility with one investor is manageable. But European originators increasingly operate across multiple facilities, asset classes, and jurisdictions. Each new relationship adds nodes to the coordination network. The complexity does not grow linearly. It compounds.
Why the Market Underestimates Complicity
Three factors explain why the coordination tax remains underappreciated.
First, it accumulates gradually. No single reconciliation exercise is catastrophic. No individual status request derails a business. The friction is diffuse, spread across teams and weeks, never concentrated enough to demand executive attention.
Second, it is normalised. Teams assume that managing investor relationships simply requires extensive manual work. The possibility of infrastructure that eliminates coordination overhead is not on most roadmaps because it was never on most radars.
Third, it is misattributed. When a facility takes longer than expected to operationalise, the delay is blamed on investor requirements or documentation complexity. Rarely is the underlying cause identified: the absence of shared infrastructure that would make such processes predictable and repeatable.
Yet the costs are real. Skilled professionals spend hours on logistics rather than analysis. Relationship management becomes administrative rather than strategic. Speed to execute, increasingly a competitive differentiator, is constrained not by decision making but by operational friction.
The Infrastructure Gap
Institutional investors are beginning to notice. They increasingly evaluate operational maturity alongside portfolio quality, and rating agencies now publish originator assessments that evaluate operational quality relative to peers, assigning levels from Strong to Weak. These assessments are monitored continuously. Clean, timely, accurate information flows signal professionalism and reduce perceived risk. Originators who cannot deliver face harder negotiations on pricing and terms.
Yet most fintech lenders still approach each facility as a bespoke project. Custom spreadsheets. Manual workflows. One off integrations. This works until it does not. The transition from first facility to scaled programme is where the coordination tax becomes unsustainable.
Toward Shared Workflows
We believe the solution is not simply better tools for individual tasks. It is shared infrastructure that connects parties across the facility lifecycle and prepares them for capital markets execution.
This means standardised data formats that eliminate translation overhead. It means shared visibility, so all parties access the same underlying information through appropriate permissions. It means modular architecture that accommodates new investors or asset classes without rebuilding from scratch.
Most importantly, it means recognising that workflow orchestration, the sequencing and handoffs between parties, is itself a layer requiring investment. Automating individual calculations achieves little if the surrounding coordination remains manual.
Outlook
The next wave of competitive advantage in European asset based finance will not come from origination innovation. Those gains have largely been captured. The opportunity now lies in operational infrastructure: the connective tissue between originators and investors.
Fintech lenders who treat this as a strategic priority will scale faster, maintain stronger investor relationships, and operate with lower overhead. Those who continue paying the coordination tax will find it increasingly difficult to compete.
The barrier is real. But it is not inevitable.
This insight was published in the DLA Quarterly Briefing 4/25 on December 30, 2025.
Photo Credit:
- Julia Schimanietz and Lennart Wendt: Lelia