Business Fronting Loans

Introduction

This guide explains the integration process of Solaris' business fronting loans product, including the mandatory information you need to collect from your customers and the necessary endpoints and webhooks you need to integrate into your solution.

Product overview

What is a fronting loan?

Solaris fronting loans solution allows you to offer single loans to your customers by leveraging Solaris' banking license. As the fronting bank, Solaris takes over the functions that require a banking license, such as customer identification and vetting (KYC/BKYC), credit risk checks, and loan origination and payout.

After a loan is paid out to the requesting customer, Solaris sells the loan agreement and receivables back to you or other investors. Therefore, fronting loans don't involve servicing activities from Solaris, such as collection or dunning.

How does it work?

In the lifecycle of a fronting loan, Solaris acts as the fronting bank that performs the initial regulatory steps until a loan is paid out.

• You start the process by collecting the required information from your customers and doing your internal due diligence and credit risk checks.
• After you approve the customers, prepare the loan agreement and applicable interest rates and pass all the details and loan application to Solaris.
• Your customers must go through an identification process (KYC/BKYC) and credit risk checks by Solaris to approve or reject the loan application.

Money flow:

After successful identification and approval of the loan application, the money flow goes as follows:

• Solaris triggers the loan payout by sending the requested loan amount to the customer's account.
• Solaris sells back the loan agreement and receivables to you or other investors, who take care of the rest of the loan lifecycle.

Available markets

Business fronting loans are currently only available for business customers in Germany and France.

System prerequisites

Before integrating Solaris' business fronting loans, you must implement the following requirements in your solution:

1. Technical setup:

Set up your environment and get your authentication keys. For step-by-step instructions, check the Technical setup guide.

2. Legal and compliance screens:

Build the necessary legal and compliance screens in your sign-up flow to collect your customers' consent to the necessary legal and compliance requirements. The Legal and compliance screens guide contains step-by-step instructions on how to create these screens and what they must contain.

Record the customer's consent on each screen as a UTC timestamp (e.g., 2019-01-01T00:00:00Z). Afterward, you must pass each timestamp in its respective field to Solaris.

• Collect the customer's consent to Solaris' Terms and Conditions and store the timestamp in the terms_conditions_signed_at field.
• Collect the customer's consent to data processing and store the timestamp in the data_terms_signed_at field.

Integration overview

The following diagram gives a high-level overview of the integration process for business fronting loans. Click on each step to go to its dedicated section for full instructions:

You can integrate Solaris' business fronting Loans product by completing the 10 steps explained in the following sections. Here's an overview of these steps:

You can find detailed descriptions of these steps and their related endpoints in the following sections.

Sequence diagram

The following sequence diagram gives an overview of the integration flow:

Webhooks

Solaris recommends subscribing to the following webhook events to better automate your processes. For detailed instructions on implementing Solaris webhooks, check the webhooks documentation.

• BENEFICIAL_OWNER
• BUSINESS_CHANGED
• BUSINESS_DELETED
• BUSINESS_IDENTIFICATION
• IDENTIFICATION
• LEGAL_REPRESENTATIVE
• PERSON_CHANGED
• PERSON_DELETED
• PERSON_MOBILE_NUMBER_CREATED
• BUSINESS_FRONTING_LOAN_APPLICATION
• BUSINESS_FRONTING_LOAN_PAYOUT

Mandatory features

You must integrate all the mandatory features for Business Fronting highlighted in the Onboarding requirements guide before going live with your solution.

Step 1: Collect business data and create business resource

Collect the mandatory data points from the customer in your sign-up flow, including all the timestamps of the business's consent to the legal and compliance screens.

Afterward, pass all the data points to Solaris by creating a business resource to represent your customer.

API reference

For a complete list of endpoints, properties, and examples related to the business resource, visit the following links:

• Business resource API reference:

  • POST Create business
  • GET Retrieve business
  • PATCH Update business

Related webhook events

• BUSINESS_CHANGED
• BUSINESS_DELETED

POST Create a business

This endpoint creates a business resource for your customer. You must collect the following mandatory data points from the customer in your sign-up flow and pass it to Solaris in the request body of this endpoint:

• name

• address

  • line_1
  • line_2
  • postal_code
  • city
  • country
• sector
• legal_form
• nace_code
• foundation_date
• crs_company_type or registration_type
• business_purpose

• tax_information

  • tax_country
  • tax_confirmation
  • registration_issuer: For Germany, it must be preceded by AMTSGERICHT (e.g., AMTSGERICHT Berlin).
  • registration_number
• registration_district
• terms_conditions_signed_at
• data_terms_signed_at
• balance_sheet_total
• number_employees

Request URL:

POST /v1/businesses

Click here to view the full API reference.

Automatic data collection (Optional)

Simplify your customers' onboarding process by opting for the automatic data collection feature. With our external service provider, Business Registry, customers can enter the country and company name, and the remaining business data fields will be automatically filled out.

GET Search for business commercial registration

The customer enters the company's name and country on your frontend and you pass this information using the following endpoint to automatically fetch the business' registration_issuer and registration_number:

Request URL:

GET /v1/commercial_registrations/search_by_name?country={{}}&name={{}}

Example response

{
  "name": "FLOOR 13 GmbH",
  "registration_number": "HRB 198673",
  "registration_issuer": "AMTSGERICHT MÜNCHEN"
}

Click here to view the full API reference.

GET Automatic business data collection

Use the following endpoint to automatically retrieve the remaining business details after obtaining the registration_issuer and registration_number from the response of the previous endpoint:

Request URL:

GET /v1/commercial_registrations/find?registration_number={{}}&registration_issuer={{}}

Example response

{
  "name": "FLOOR 13 GmbH",
  "address": {
    "country": "DE",
    "postal_code": "86919",
    "city": "Utting a.Ammersee",
    "line_1": "Seestraße 9",
    "line_2": ""
  },
  "legal_form": "GMBH",
  "tax_country": "DE",
  "registration_number": "HRB 198673",
  "registration_issuer": "AMTSGERICHT MÜNCHEN",
  "registration_date": "2012-05-09",
  "registry_updated_at": "2015-11-17",
  "legal_representatives": [
    {
      "first_name": "Stefan",
      "last_name": "Schneider"
    }
  ]
  "commercial_registry_industry_key": [
      "66190 - Sonstige mit Finanzdienstleistungen verbundene Tätigkeiten",
      "70109 - Sonstige Verwaltung und Führung von Unternehmen und Betrieben",
      "70220 - Unternehmensberatung",
      "73110 - Werbeagenturen"
  ]  
}

Click here to view the full API reference.

Foreign companies examples

If the company is not registered in Germany, you can still use this service for companies in other countries. The following examples describe how to find the business registration details for a French company.

GET Search for business commercial registration (France)

Request

GET v1/commercial_registrations/search_by_name?name=PARISOL&country=FR

Response

{
  "name": "PARISOL",
  "registration_number": "513 937359",
  "registration_issuer": null
}

GET Automatic business data collection (France)

Request

GET  /v1/commercial_registrations/find?registration_number=513937359&country=FR

Response

{
  "name": "PARISOL",
  "address": {
    "country": "FR",
    "postal_code": null,
    "city": "NANTERRE",
    "line_1": "RUE D ARRAS 18",
    "line_2": ""
  },
  "legal_form": null,
  "tax_country": "FR",
  "registration_number": "513 937359",
  "registration_issuer": null,
  "registration_date": "2009-07-27",
  "registry_updated_at": null,
  "legal_representatives": [
    {
      "first_name": "Stefan",
      "last_name": "Schneider"
    }
  ]
}

Step 2: Upload business documents

The business must submit the required documents for the business identification process (BKYC) in your sign-up flow. The required documents depend on different factors, such as the business's legal form, sector, etc. Check the appendix for a list of required documents per legal form.

Create document resources for all the required documents you've collected from the business and attach them to the business using the following endpoints.

API reference

For a complete list of endpoints, properties, and examples related to the business document resource, visit the following links:

• Business Documents API Reference Documentation:

  • POST Create a business document
  • GET Retrieve a business document
  • GET Download business document
  • PATCH Update a business document
  • DELETE Delete a business document

POST Upload a document

This endpoint uploads a document and links it to the business with the business_id specified in the request URL.

You have to add the following properties to the request body:

• document_type: The document type. For a list of possible values, check the API reference.
• file: The file to be uploaded.

Request URL

POST /v1/businesses/{business_id}/documents

Click here to view the full API reference..

After creating a business resource, you must create the natural person(s) associated with the business and assign them to their respective roles. The natural person(s) are represented in our system by a person resource that contains their data, and then you must assign each person a dedicated role. The mandatory roles are legal representative and beneficial owner.

Step 3: Create Legal representative(s)

In this step, collect the mandatory data points from the business' legal representative(s) and create a person object for each representative. Then create a legal_representative resource and link it to the corresponding person object.

What is a legal representative?

Legal representatives can be natural persons (individuals) or legal entities (businesses) appointed by a company to act on its behalf. The legal representative(s) of a company may be, for instance, its general manager(s) or its managing director(s). The names of a business' legal representatives (Gesellschafter) are usually recorded in the company's commercial register.

Legal representatives as legal entities

A business' legal representative could be a legal entity instead of a natural person. For example, the legal representative of a GbR company could be another GmbH or AG company.

In this case, you must do the following:

• Collect the business data of the legal entity acting as the legal representative and create a business resource for it.
• The natural persons who are the legal representatives of this legal entity are then the ones who will go through the KYC flow.

3.1 Create person resource(s) for each legal representative

For each of the business' legal representatives, you must collect the following mandatory information and pass them to Solaris by creating a person resource.

API reference

For a complete list of endpoints, properties, and examples related to the person resource, visit the following links:

• Person resource API reference:

  • POST Create person
  • GET Retrieve a person
  • PATCH Update person

Related webhook events

• PERSON_CHANGED
• PERSON_DELETED

POST Create person (Legal representative)

Call this endpoint to create a person resource for the business' legal representative. You must collect the following mandatory data points in your sign-up flow and pass it to Solaris in the request body of this endpoint:

• salutation
• first_name
• last_name

• address

  • line_1
  • line_2
  • postal_code
  • city
  • state
  • country
• birth_date
• birth_city
• birth_country
• nationality
• mobile_number

Request URL:

POST /v1/persons

Click here to view the full API reference

3.2 Create legal representative resource(s)

For each person resource you created in the previous step, you must create a legal_representative resource, and set the value of the legal_representative attribute to its associated person_id.

POST Create legal representative

API reference

For a complete list of endpoints, properties, and examples related to the legal_representative resource, visit the following links:

• Business Legal Representative resource API reference:

  • POST Create a business legal representative
  • GET Index a business legal representatives
  • PATCH Update a business legal representative

Related webhook events

• LEGAL_REPRESENTATIVE

POST Create legal representative

Call this method to create a legal_representative resource on the business and link a person to the business as a legal representative.

Attributes

• type_of_representation: A legal_representative could have a type_of_representation, which indicates whether this legal representative can make decisions alone or jointly with other legal representatives. This attribute is optional. Possible values are ALONE, JOINT, or OTHER.
• power_of_attorney_confirmed_at: In case of JOINT representation, legal representatives need to confirm the power of attorney's timestamp in the power_of_attorney_confirmed_at attribute.

Request URL:

POST /v1/businesses/{business_id}/legal_representatives

Click here to view the full API reference.

Step 4: Create Ultimate Beneficial Owner(s)

In this step, you must do the following:

• Collect the mandatory data points from the business' beneficial owner(s) and create a person object for each beneficial owner.
• Create a beneficial_owner resource and assign it to its corresponding person object.
• Include the definition of the beneficial owner in your UI.

What is a Beneficial Owner?

The Beneficial Owners (BO) are natural persons who, directly or indirectly, own more than 25% of a company's shares.

According to the German Money Laundering Act (Geldwäschegesetz - GwG), a Beneficial Owner is a natural person who:

• Ultimately owns or controls the business.
• On whose behalf a transaction is ultimately carried out.
• On whose behalf a business relationship is ultimately established.

Beneficial owner legal definition

Please ensure that the beneficial owner's full definitions and the checkbox are available to your customers in your sign-up flow.

Full definition in English

The ultimate beneficial owner in the sense of the German Money Laundering Act (Geldwäschegesetz - GwG) is the natural person who ultimately owns or controls the contracting party, or on whose behalf a transaction is ultimately carried out or a business relationship is ultimately established. This particularly includes: 1. In case of legal persons, foundations without legal capacity and, in the case of other companies, any natural person who directly or indirectly holds more than a 25% share of the capital, controls more than 25% of the voting rights or exercises control in any comparable manner (+). Establishing the identity of the beneficial owner can be waived, though, for companies that are listed in an organised market in the EU with in accordance with Sec on 2 para. 5 of the Securities Trading Act or, in case of listed companies from a third country, if they are subject to EU-equivalent transparency requirements regarding voting rights or equivalent international standards; 2. In case of foundations or other legal arrangements with legal capacity (or similar) used to manage or distribute assets or property as trustee (trust management), or through which third parties are instructed with the management or distribution of assets or property, the ultimate beneficial owner is:

• any natural person who is a trustor/settlor, trustee or protector, if applicable
• any natural person who is a member of the board of the foundation,
• any natural person designated as a beneficiary,
• the group of natural persons in whose favour the assets are mainly to be administered or distributed, provided that the natural person who is to be the ultimate beneficial owner of the assets or property has not yet been determined
• any natural person who, by any other means, directly or indirectly exercises control over the asset management or property or the distribution of income.

3. In the event of acting on behalf of another party, the ultimate beneficial owner includes the party upon whose initiative the transaction is performed. If the contracting party acts as a trustee, he also acts on behalf of another party. (+) Indirect control exists particularly if corresponding shares are held by one or more associations pursuant to Sec on 20 para. 1 GwG which are controlled by a natural person. Control exists particularly if the natural person can directly or indirectly exert a controlling influence on the association pursuant to Sec on 20 para. 1 GwG. Sec on 290 para. 2 to 4 German Commercial Code (Handelsgesetzbuch - HGB) applies mutatis mutandis to the existence of a controlling influence. If, after extensive audits have been performed and without the facts according to Sec on 43 para. 1 GwG applying, no natural person has been identified or if there is any doubt that the identified person is the ultimate beneficial owner, the ultimate beneficial owner shall be the legal representative, managing partner or partner of the contracting party.

Full definition in German

Wirtschaftlich Berechtigter im Sinne des Geldwäschegesetzes, ist die natürliche Person, in deren Eigentum oder unter deren Kontrolle der Vertragspartner letztlich steht, oder auf deren Veranlassung eine Transaktion letztlich durchgeführt oder eine Geschäftsbeziehung letztlich begründet wird. Hierzu zählen insbesondere: 1. Bei juristischen Personen, außerrechtsfähigen Stiftungen und bei sonstigen Gesellschaften jede natürliche Person, welche unmittelbar oder mittelbar mehr als 25 Prozent der Kapitalanteile hält, mehr als 25 Prozent der Stimmrechte kontrolliert oder auf vergleichbare Weise Kontrolle ausübt(2). Auf die Abklärung des wirtschaftlich Berechtigten kann aber verzichtet werden bei Gesellschaften, die innerhalb der EU an einem organisierten Markt im Sinne des § 2 Abs. 5 des Wertpapierhandelsgesetzes notiert sind, oder bei börsennotierten Unternehmen aus einem Drittstaat, wenn sie dem Gemeinschaftsrecht entsprechenden Transparenzanforderungen im Hinblick auf Stimmrechtsanteile oder gleichwertigen internationalen Standards unterliegen; 2. Bei rechtsfähigen Stiftungen und Rechtsgestaltungen, mit denen treuhänderisch Vermögen verwaltet oder verteilt oder die Verwaltung oder Verteilung durch Dritte beauftragt wird, oder diesen vergleichbaren Rechtsformen zählt zu den wirtschaftlich Berechtigten:

• jede natürliche Person, die als Treugeber, Verwalter von Trusts (Trustee) oder Protektor, sofern vorhanden,
• jede natürliche Person, die Mitglied des Vorstands der Stiftung ist,
• jede natürliche Person, die als Begünstigte bestimmt worden ist,
• die Gruppe von natürlichen Personen, zu deren Gunsten das Vermögen hauptsächlich verwaltet oder verteilt werden soll, sofern die natürliche Person, die Begünstigte des verwalteten Vermögens werden soll, noch nicht bestimmt ist,
• jede natürliche Person, die auf sonstige Weise unmittelbar oder mittelbar beherrschenden Einfluss auf die Vermögensverwaltung oder Ertragsverteilung ausübt.

3. Bei Handeln auf Veranlassung zählt zu den wirtschaftlich Berechtigten derjenige, auf dessen Veranlassung die Transaktion durchgeführt wird. Soweit der Vertragspartner als Treuhänder handelt, handelt er ebenfalls auf Veranlassung.

4.1 Create person resource(s) for each beneficial owner

For each of the business' beneficial owners, you must collect the following mandatory information and pass them to Solaris by creating a person resource.

POST Create person (Beneficial owner)

Call this endpoint to create a person resource for the business' beneficial owner. You must collect the following mandatory data points in your sign-up flow and pass it to Solaris in the request body of this endpoint:

• first_name
• last_name

• address

  • line_1
  • line_2
  • postal_code
  • city
  • state
  • country
• birth_date
• nationality

Request URL:

POST /v1/persons

Click here to view the full API reference

4.2 Create beneficial owner resource(s)

For each person resource you created in the previous step, you must create a beneficial_owner resource, and set the value of the person_id attribute to the id of the associated person resource.

POST Create beneficial owner

API reference

For a complete list of endpoints, properties, and examples related to the beneficial_owner resource, visit the following links:

• Business Beneficial Owner resource API reference:

  • POST Create a business beneficial owner
  • GET Retrieve a business beneficial owner
  • PATCH Update a business beneficial owner

Related webhook events

• BENEFICIAL_OWNER

POST Create beneficial owner

Call this method to create a beneficial_owner resource on the business and link a person to the business as a beneficial owner. You must add the following properties in the request body of this endpoint:

• person_id: The ID of the person resource you created for the beneficial owner.
• voting_share: The beneficial owner's voting share in the business.

Request URL:

POST /v1/businesses/{business_id}/beneficial_owners

Click here to view the full API reference.

Step 5: Create tax identifications

In this step, you must do the following:

• Collect the mandatory tax information about the natural person(s) associated with the business and create person tax identification resource(s).

API reference

For a complete list of endpoints, properties, and examples related to the person tax identification resource, visit the following links:

• Person tax identifications API reference:

  • POST Create person tax identification
  • GET Retrieve person tax identification
  • PATCH Update person tax identification

Related webhook events

• PERSON_TAX_IDENTIFICATION_CHANGED

POST Create person tax identification

Call this endpoint to create a person tax identification for the customer with the person_id specified in the request URL. Collect the following tax information from your customers and pass them to Solaris in the request body:

• number
• country
• primary

If the customer has not submitted their TIN to your solution yet (i.e., the value of number is null), then include the following properties in the request:

• reason_no_tin: Possible values are NOT_ASSIGNED_YET, NOT_ASSIGNED_BY_COUNTRY, OTHER.
• reason_description: Applies only if the reason_no_tin is OTHER.
• tax_id_type: (Only for Spain) Possible values are NIE and NIF.

Request example:

POST /v1/persons/{person_id}/tax_identifications

Click here to view the full API reference.

Step 6: Complete the business identification (BKYC) process

In this step, you must do the following:

• 6.1. Trigger the business identification process to identify the business legal entity and all legal representative(s), and make sure all legal representative(s) are successfully identified via IDnow.
• 6.2. Implement the endpoints related to compliance questions, forward any questions (if any) to the business' legal representatives, and send the answers back to Solaris

6.1 Business identification

What is BKYC?

Solaris' BKYC solution uses RESTful APIs to perform a series of identification and compliance checks for business customers.

How does BKYC work?

The business identification consists of two asynchronous processes:

• Legal identification: Solaris' Banking Operations team verifies the completeness and accuracy of the data submitted by the business customer and ensures that all legal representatives and ultimate beneficial owners are disclosed and linked to the business.
• Video identification(s): All of the business' legal representatives and authorized persons must undergo a video identification session with IDnow to validate their data against their identification documents.

API reference

For a complete list of endpoints, properties, and examples related to business identification (BKYC), visit the following links:

• Business identification API reference:

  • POST Create business identification
  • GET Retrieve business identification

Related webhook events

• BUSINESS_IDENTIFICATION
• IDENTIFICATION

POST Initiate business identification

Call this endpoint to initiate the business identification process, which automatically triggers both the legal identification of the business and the video identification of applicable natural person(s). You have to specify the identification method in the request body. The default method is idnow.

Request URL

POST /v1/businesses/{business_id}/identifications

Response

The API response returns an identification object with a unique id representing the business identification resource and its overall status. Additionally, the payload contains individual identification objects for the video identification sessions of legal representatives, including their respective resource id, IDnow status, reference, and url for completing the process.

The payload also provides information on the legal identification process, including its dedicated legal_identification_status. You must call the API to monitor the progress of this process, particularly the legal_identification_missing_information field, where Solaris will highlight compliance questions requiring answers from the business.

Click here to view the full API reference.

6.2 Compliance questions

During the legal identification process, Solaris' legal and compliance team may require additional information from your customers, including answers to certain compliance questions and/or additional documents to be uploaded.

How to identify compliance questions and documents?

1. If Solaris needs further clarification during the business identification, you will receive a notification on the BUSINESS_IDENTIFICATION webhook.
2. Call the GET Retrieve a business identification endpoint to retrieve the required details.

Only compliance questions

If Solaris has compliance questions for the business, the field legal_identification_missing_information will contain only COMPLIANCE_QUESTIONS as a value. In this case, customers can simply provide answers to the questions on your frontend. Additionally, we recommend to have document upload set as optional to enable the customer to add supporting documents.

Example payload

{
  "legal_identification_status": "information_required",
  "legal_identification_status_missing_information": "COMPLIANCE_QUESTIONS"
}

Both compliance questions & documents

If Solaris requires both answers to compliance questions and documents from the business, the field legal_identification_missing_information will contain COMPLIANCE_QUESTIONS and a document_type enum, e.g., FOUNDATION_DOCUMENT or any other document_type. In this case, customers need to provide answers to the questions on your frontend. Additionally, they need to upload the required document type specified in the payload. You should have document upload set as mandatory on your frontend and submit the document to Solaris using the POST Create a Business Document endpoint.

Example payload

{
  "legal_identification_status": "information_required",
  "legal_identification_status_missing_information": 
  [
    "COMPLIANCE_QUESTIONS",
    "FOUNDATION_DOCUMENT"
  ]
}

How to retrieve compliance questions and provide answers?

In case your customer must answer compliance questions, you need to call the following endpoints to retrieve the questions and allow to the customer to answer them on your frontend:

GET Retrieve compliance questions

To get the compliance questions, call the following endpoint:

Request URL

GET /v1/businesses/{business_id}/identifications/{business_identification_id}/legal_identification/questions

Response example

The API call returns an object that includes the question(s) with a unique ID and the corresponding text. You must redirect these questions to your customers and retrieve their answers as part of your workflow. You should also provide a dedicated page for answering all questions separately.

{
  "question_id": "ebb463137becc09788dfe21fc066e670qstn",
  "question_text": "Please provide the license for security / guarding services (Bewachungsgewerbe): § 34a GewO",
  "legal_identification_id": "14eb210435e09ab7f6a06c8b9b86ce27lid",
  "business_identification_id": "4c74c804eaea5d2a2d64ef400a27a4d3bid",
  "business_id": "880bbac68a34add190786b9c74f4c82fcbiz",
  "answer_id": null,
  "answer_text": "string",
  "asked_at": "2021-07-16T13:38:06.000Z",
  "answered_at": null
}

Click here to view the full API reference.

Create answers for compliance questions

After receiving the compliance question answers from the customer, call the following endpoint to share them with Solaris. Note that you must make a separate API call for each answer.

Request URL

You have to provide the question's answer in the request body of this endpoint.

POST /v1/businesses/{business_id}/identifications/{business_identification_id}/legal_identification/questions/{question_id}/answers

Click here to view the full API reference.

PATCH Update business legal identification

Call this method to update the legal identification and mark it as ready to resume the identification process after adding all answers to the compliance questions. This endpoint changes the legal_identification_status from information_required to pending when called.

Request URL

PATCH /v1/businesses/{business_id}/identifications/{id}/legal_identification/mark_as_ready

Click here to view the full API reference.

6.3 Customer Due Diligence

Solaris conducts risk screening and customer vetting checks, known as the Customer Due Diligence process, on the business legal entity. The results are returned in the GET business resource. For more information, check the Customer Due Diligence guide.

During the CDD checks, the application status will change to cdd_pending. In case of any red or yellow status value for any of the CDD-related properties, the fronting application status will change to rejected. The application status will change to approved only if all the CDD-related properties have a green status value.

Step 7: Create business fronting loan application

In this step, you must collect the mandatory information from the business in your sign-up flow and pass this information to Solaris by creating a business fronting loan application.

The fronting loan application includes all the required information about the beneficiary, such as scoring information, loan information, and beneficiary account IBAN, which the credit scorer uses to initiate a series of credit checks.

POST Create business fronting loan application

This endpoint creates a fronting loan application and assigns it to the business with the business_id specified in the request URL.

Required properties:

The following properties are mandatory and must be added to the request body:

• transaction_description: The transaction reference, which the recipient can see. Only use SEPA allowed characters in this field.
• transaction_end_to_end_id: SEPA identifier (provided by the end customer who initiated the SEPA transaction), routed through the whole payment process. (string, max 35 characters without whitespace)
• requested_amount: The amount (in EUR) requested to be paid to the recipient.
• duration: The duration over which the loan will be repaid.
• recipient_name: The name of the loan recipient.
• recipient_iban: The IBAN of the loan's recipient, to which the loan will be paid out.
• purpose: The reason for the loan application.
• purpose_description: Additional details regarding the reasons for the loan application.
• creditreform_pd: The business's probability of default as scored by any credit risk service provider, e.g., Creditreform.
• creditreform_score: The business's credit score as scored by any credit risk service provider, e.g., Creditreform.

Request example

// POST /v1/businesses/{business_id}/fronting_loan_applications
{
  "creditreform_pd": "0.10",
  "creditreform_score": 2,
  "duration": 24,
  "purpose": "Buying office equipment",
  "purpose_description": "Buying office equipment for new headquarters.",
  "recipient_iban": "DE92370601930002130041",
  "recipient_name": "Daniel Schmidt",
  "requested_amount": {
    "currency": "EUR",
    "unit": "cents",
    "value": 10000
  },
  "transaction_description": "Example transaction.",
  "transaction_end_to_end_id": "DDHHDHG333243"
}

Response example

The API call returns an object with a unique id for the business fronting loan application, including the application status and the remaining attributes, which will be populated during the application lifecycle.

Click here to view the full API reference

GET Retrieve business fronting loan application

This endpoint returns the current status and details of an existing business fronting loan application. For a list of possible values of the application status and their descriptions, check the appendix.

Additionally, subscribe to the webhook event BUSINESS_FRONTING_APPLICATION to receive status updates on the application.

Request URL

GET /v1/businesses/{business_id}/fronting_loan_applications/{application_id}

Click here to view the full API reference

Application status flow

The following diagram shows the different statuses and transitions for a business fronting application:

Step 8: Upload documents and link them to the loan application

In this step, you must create document resources for all the required documents, such as loan agreement, credit risk report, invoices etc., and link them to the business fronting loan application.

Use the same endpoints described in Step 4 to upload the loan-related documents.

PUT Link documents to fronting application

After creating the document resources, you must link each document to the fronting loan or factoring application.

This endpoint links a document resource to the business fronting loan or factoring application. You must add the following properties in the request body:

• document_type: The document type. For a list of possible values, check the appendix.
• document_id: The unique ID of the document resource.

Request URL

// PUT /v1/businesses/{business_id}/fronting_loan_applications/{application_id}/documents
{
  "document_id": "69ec2a9d8dbaf5ea1b13124098a34ea3cdoc",
  "document_type": "INVOICE"
}

Click here to view the full API reference

Step 9: Link the business identification to the loan application

In this step, you must link the business identification resource to the business fronting loan application by calling the following endpoint:

PUT Link identification to loan application

This endpoint links a business identification resource to the business fronting loan application. You must add the following properties in the request body:

• identification_id: The unique ID of the identification resource, created after triggering the business identification process.

Request URL

// PUT /v1/businesses/{business_id}/fronting_loan_applications/{application_id}/identification
{
  "identification_id": "1063504cf74919f60ae4c806bdc9ce75bid"
}

Click here to view the full API reference

Step 10: Trigger the loan payout

After a successful business identification and the approval of the business fronting loan application, you must trigger the loan payout by calling the following endpoint.

POST Trigger loan payout

This endpoint creates a loan and triggers the loan payout process to the respective business account. You must add the following properties in the request body:

• settlement_account_iban: Solaris' account, from which the loan amount is transferred to the customer's account.

Request URL

// POST /v1/businesses/{business_id}/fronting_loan_applications/{application_id}/payout
{
  "settlement_account_iban": "DE07110101014503906016"
}

Response example

The API call returns the loan object with the loan id. The payload contains the loan details, the IBANs of related accounts, and the status of the loan payout, which is set to payout_pending after calling this endpoint.

Click here to view the full API reference

GET Retrieve business fronting loan

This endpoint returns all the details of a business' fronting loan. Additionally, subscribe to the webhook event BUSINESS_FRONTING_LOAN_PAYOUT to receive status updates about the loan.

Request URL

GET /v1/businesses/{business_id}/fronting_loans/{loan_id}

Click here to view the full API reference

Money flow

After triggering the loan payout, you have to complete the money flow described below.

Accounts

The money moves between three different accounts:

• Settlement account: A Solaris account from which the loan amount is transferred to the customer's account.
• Collateral account: A Solaris account, but under your name.
• Collection account: Your account.

Process

After triggering the loan payout process, you have to ensure that all transfers are executed to the relevant account:

1. Solaris transfers the loan amount from the settlement account to the customer account.
2. If applicable, Solaris transfers the agio amount from the settlement account to your collection account.
3. You must settle the full loan amount (agio + net loan amount) from your collateral account to the Solaris settlement account.

After all the transfers are executed successfully, the loan payout status changes to payout_issued. The customer should receive the loan amount to their account.

Testing

Banque de France checks (Only for France)

This section includes instructions on how to test different scenarios for the Banque de France checks.

Happy path

Complete the following steps to simulate a happy path scenario where the business would pass the Banque de France checks.

1. Create a business resource using the following properties:

Request example

// POST /v1/businesses
{
  "name": "Business FR",
  "sector": "FOREIGN_COMPANIES",
  "legal_form": "FR_SA",
  "tax_information": {
    "registration_number": "552144503",
    "tax_country": "FR",
    "registration_issuer": "registration_issuer_fr"
  },
  "vat_number": "552144503"
}

2. Create a person resource using the following properties:

Request example

// POST /v1/persons
{
  "first_name": "Adchilove",
  "last_name": "Toussaint",
  "salutation": "MR",
  "birth_date": "1985-07-01",
  "birth_province": "97",
  "industry": null,
  "industry_key": null,
  "nace_code": null,
  "registration_number": "registration_number_1",
  "postal_code": "1234"
}

3. Assign the roles of legal representative and beneficial owner to the created person resource.

Request example (Legal representative)

// POST /v1/businesses/{business_id}/legal_representatives
{
  "legal_representative_id": "0ba2211cab11af6094d60ead81f2bd9dcper"
}

Request example (Beneficial owner)

// POST /v1/businesses/{business_id}/beneficial_owners
{
  "person_id": "0ba2211cab11af6094d60ead81f2bd9dcper"
}

4. Create a fronting business loan as described in Step 6.
5. This scenario should lead to the application passing the status scoring_pending.

Unhappy path

Complete the following steps to simulate an unhappy path scenario where the business would fail the Banque de France checks leading to a rejected status of the fronting loan application.

1. Create a business resource using the following properties:

Request example

// POST /v1/businesses
{
  "name": "Business FR",
  "sector": "FOREIGN_COMPANIES",
  "legal_form": "FR_SA",
  "tax_information": {
    "registration_number": "234568087",
    "tax_country": "FR",
    "registration_issuer": "registration_issuer_fr"
  },
  "vat_number": "234568087" 
}

2. Create a person resource for the legal representative and beneficial owner using the following properties:

Request example

// POST /v1/persons
{
  "first_name": "Marie",
  "last_name": "Marchand",
  "salutation": "MS",
  "birth_date": "1980-01-26",
  "birth_province": "86",
  "industry": null,
  "industry_key": null,
  "nace_code": null,
  "registration_number": "registration_number_1",
  "postal_code": "1234"
}

3. Assign the roles to the person resource

Request example (Legal representative)

// POST /v1/businesses/{business_id}/legal_representatives
{
  "legal_representative_id": "0ba2211cab11af6094d60ead81f2bd9dcper"
}

Request example (Beneficial owner)

// POST /v1/businesses/{business_id}/beneficial_owners
{
"person_id": "0ba2211cab11af6094d60ead81f2bd9dcper"
}

4. Create a fronting business loan as described in Step 6.
5. This scenario should lead to the application reaching the status rejected.

What's next?

Congratulations! You've successfully integrated Solaris' business fronting Loans solution.

Check the following appendices section for additional information on enums and testing data.

For an overview of Solaris' lending products, check the lending products overview page.

Useful resources

Check the following links for additional related guides and API reference documentation.

• Business Fronting API Reference documentation
• Business Identification API Reference documentation
• Video Identification guide
• SEPA Transfers

Appendix I: Enums

Business fronting loan application status

The following table includes the enums for the field status and their descriptions in the business fronting loan application resource. For example, it's available when you call the GET Retrieve business fronting loan application.

Business fronting loan payout status

The following table includes the enums for the field status and their descriptions for the business fronting loan payout. For example, it's available when you call the GET Retrieve business fronting loan.

CRS company type

The field crs_company_type is required to collect the mandatory tax information and create the business tax_identification resource. The following table includes the possible values for this field and their descriptions:

Document types

The following table includes the possible values for the field document_type and their descriptions.

Idnow status

The following table includes the possible values for the field status for the video identification process carried out by IDnow and the related description of each status.

IDnow provides a reason whenever the identification has a canceled or aborted status. No reason can be disclosed for the final failed status.

Tax country

The following tables includes the possible values for the field tax_country:

Sector

The following are the possible values for the field sector.

• ECONOMICALLY_SELF_EMPLOYED
• ECONOMIC_DEPENDENT
• FOREIGN_COMPANIES
• FOREIGN_ECONOMIC_DEPENDENT
• FOREIGN_PRIVATE_INDIVIDUAL
• FOREIGN_SELF_EMPLOYED_PRIVATE_PERSON
• GERMAN_BANKS
• MUNICIPALITY_AND_MUNICIPALITY_ASSOCIATION
• OTHER_COMPANIES_WORKMAN
• OTHER_COMPANIES
• OTHER_PRIVATE_INDIVIDUAL

Legal form

The selected value for the field tax_country influences the accepted values for the field legal_form. The following are the possible values for the field legal_form per each tax_country.

Austria (AT)

• AT_SE
• AT_OHG
• AT_KG
• AT_AG
• AT_GESMBH
• AT_EG
• AT_GBR
• AT_EV
• AT_SOLE_PROPRIETORSHIP
• AT_SELF_EMPLOYED
• AT_AMT
• AT_KOR
• AT_STIFTUNGEN
• AT_GMBH
• AT_GMBH_CO_KG

Belgium (BE)

• BE_SNC
• BE_SCS
• BE_SA
• BE_SPRL
• BE_SE
• BE_SCA
• BE_SC
• BE_SCRI
• BE_SEP
• BE_SF
• BE_SPRLU
• BE_SOLE_PROPRIETORSHIP
• BE_SELF_EMPLOYED

Bulgaria (BG)

• BG_AD
• BG_OOD
• BG_KDA
• BG_KD
• BG_SD
• BG_SELF_EMPLOYED
• BG_SOLE_PROPRIETORSHIP

Croatia (HR)

• HR_DD
• HR_DOO
• HR_JDOO
• HR_KD
• HR_JTD
• HR_SELF_EMPLOYED
• HR_SOLE_PROPRIETORSHIP
• HR_ORTA

Czech Republic (CZ)

• CZ_AS
• CZ_SRO
• CZ_KS
• CZ_VOS
• CZ_DRUZSTVO
• CZ_FYZICKA_OSOBA
• CZ_SOLE_PROPRIETORSHIP
• CZ_SELF_EMPLOYED

France (FR)

• FR_AE
• FR_EI
• FR_SNC
• FR_SCS
• FR_SA
• FR_SAS
• FR_SARL
• FR_SE
• FR_SCA
• FR_EURL
• FR_SC
• FR_SCOP
• FR_SELARL
• FR_SOLE_PROPRIETORSHIP
• FR_SELF_EMPLOYED

Germany & others

Solaris accepts the following legal forms for companies in Germany and other countries that are not specified in our system:

• AG
• EG
• EK
• EV
• NEV
• GBR
• GMBH
• GMBH_CO_KG
• GMBH_I_GR
• KG
• KGAA
• LTD
• MUNICIPALITY
• MUNICIPAL_COMPANY
• NONE
• OHG
• PARTG
• PRIVATE_PERSON
• SAVINGS_BANK
• SE
• SELF_EMPLOYED
• SOLE_PROPRIETORSHIP
• UG
• UG_I_GR
• FOREIGN_CORPORATION
• ADOR
• AMT
• KDOR
• STIFTUNGEN
• SECOKG
• AGCOKG

Hungary (HU)

• HU_NYRT
• HU_KFT
• HU_BT
• HU_KKT
• HU_SOLE_PROPRIETORSHIP
• HU_SELF_EMPLOYED
• HU_ORTA

Italy (IT)

• IT_SE
• IT_SNC
• IT_SAS
• IT_SPA
• IT_SRL
• IT_SAPA
• IT_SCPA
• IT_SCARL
• IT_SCOP
• IT_SS
• IT_SOLE_PROPRIETORSHIP
• IT_SELF_EMPLOYED

Luxembourg (LU)

• LU_SNC
• LU_SCS
• LU_SA
• LU_SARL
• LU_SE
• LU_SCA
• LU_SCSP
• LU_SARLS
• LU_SC
• LU_SCOP
• LU_SOLE_PROPRIETORSHIP
• LU_SELF_EMPLOYED
• LU_SECA
• LU_ASBL
• LU_FON
• LU_SP

Poland (PL)

• PL_SA
• PL_SPZOO
• PL_SE
• PL_SKA
• PL_SPK
• PL_SPJ
• PL_SELF_EMPLOYED
• PL_OTHER

Portugal (PT)

• PT_SNC
• PT_SC
• PT_SA
• PT_LDA
• PT_SE
• PT_SUNI
• PT_EIRL
• PT_SCIV
• PT_COP
• PT_SOLE_PROPRIETORSHIP
• PT_SELF_EMPLOYED

Romania (RO)

• RO_SA
• RO_SRL
• RO_SCA
• RO_SCS
• RO_SNC
• RO_SELF_EMPLOYED
• RO_SOLE_PROPRIETORSHIP

Serbia (RS)

• RS_AD
• RS_DOO
• RS_KD
• RS_OD
• RS_SELF_EMPLOYED
• RS_SOLE_PROPRIETORSHIP

Slovenia (SI)

• SI_DD
• SI_DOO
• SI_KDD
• SI_KD
• SI_DNO
• SI_SELF_EMPLOYED
• SI_SOLE_PROPRIETORSHIP

Spain (ES)

• ES_SRC
• ES_SC
• ES_SA
• ES_SAS
• ES_SRL
• ES_SE
• ES_SCA
• ES_SLNE
• ES_SAU
• ES_SLU
• ES_SPRO
• ES_SCOP
• ES_SOLE_PROPRIETORSHIP
• ES_SELF_EMPLOYED

Switzerland (CH)

• CH_DE_AG
• CH_FR_SA
• CH_IT_SA
• CH_DE_GMBH
• CH_FR_SARL
• CH_IT_SAGL
• CH_SE
• CH_DE_KOMAG
• CH_FR_SCA
• CH_IT_SACA
• CH_DE_KG
• CH_FR_SCM
• CH_IT_SAC
• CH_DE_KIG
• CH_FR_SNC
• CH_IT_SNC
• CH_DE_EG
• CH_FR_SS
• CH_IT_SS
• CH_SELF_EMPLOYED
• CH_SOLE_PROPRIETORSHIP
• CH_DE_KMG

The Netherlands (NL)

• NL_VOF
• NL_CV
• NL_NV
• NL_BV
• NL_SE
• NL_CVOA
• NL_COPV
• NL_MTS
• NL_SOLE_PROPRIETORSHIP
• NL_SELF_EMPLOYED
• NL_VERENIGING
• NL_STICHT

Turkey (TR)

• TR_ADI_SIR
• TR_AS
• TR_LS
• TR_KOM_STI
• TR_KOLL_STI
• TR_SELF_EMPLOYED
• TR_SOLE_PROPRIETORSHIP

United Kingdom

• GB_SE
• GB_PARTNERSHIP
• GB_LP
• GB_PLC
• GB_LTD
• GB_COPS
• GB_UAS
• GB_PRCU
• GB_PUCU
• GB_SOLE_PROPRIETORSHIP
• GB_SELF_EMPLOYED

Sector, tax country, and legal form mapping

Please note that there are certain dependencies between the fields tax_country, sector, and legal_form. For example, based on the value selected for the field tax_country, certain values will be accepted for the field sector, and based on the value selected for the field sector, certain values will be accepted for the field legal_form.

The following sections give an overview of the mapping between these fields.

Tax country and sector mapping

The selected value for the field tax_country influences the accepted values for the field sector. The following table gives an overview about the mapping of values between the field tax_country and sector.

Sector and legal form mapping

The selected value for the field sector influences the accepted values for the field legal_form. The following table gives an overview about the mapping of values between the field sector and legal_form.

Legal identification status

The following table includes the possible values for the field legal_identification_status for the legal identification process of the business legal entity carried out by Solaris and the related description of each status.

NACE code

The Statistical Classification of Economic Activities in the European Community, commonly known as NACE, is the industry standard classification system used in the European Union.

NACE uses four hierarchical levels:

• Level 1: 21 sections identified by alphabetical letters A to U;
• Level 2: 88 divisions identified by two-digit numerical codes (01 to 99);
• Level 3: 272 groups identified by three-digit numerical codes (01.1 to 99.0);
• Level 4: 629 classes identified by four-digit numerical codes (01.11 to 99.00).

The first four digits of the code, which is the first four levels of the classification system, are the same in all European countries. National implementations may introduce additional levels. The fifth digit might vary from country to country and further digits are sometimes placed by suppliers of databases.

For example, if the NACE code A 01.11 (Growing of cereals (except rice), leguminous crops and oil seeds) would apply to the person/business, supply the value like such:

nace_code = "A 01.11"

Please visit this site for the list of values of NACE codes values you need to implement in your solution. The list is available in multiple languages.

NACE codes are mandatory for B2B and freelancer customers in Germany, Italy, and Spain. For France, NACE codes are excluded due to the usage of different coding system CODE NAF.

Solarisident status

The following table includes the possible values for the field status, which refers to the overall status of the business identification process (BKYC), including the legal identification of the business legal entity carried out by Solaris and the video identification of the business's natural persons.

Appendix II: BKYC required documents

The following table includes the required documents for identification for each legal form:

Appendix III: Testing samples for GET Search for business commercial registration

The following table includes testing samples for the GET Search for business commercial registration endpoint, including values for the fields country, registration_number, registration_issuer, and name.

Appendix IV: FAQs

Legal Representative FAQs

The company I am about to register is a „Gesellschaft mit beschränkter Haftung“ (GmbH) – who is my legal representative?

The easiest and surest way to figure that out is to check your current register excerpt (Handelsregisterauszug). In there you'll find all the official legal representatives which you would need to tell us. As a further indication, these people also need to be listed in the Imprint of your website (Impressum).

The Legal Representative has sole representations rights – do I need to add the other legal representatives as well?

Yes. Even though this legal representative could conclude the process on behalf of the company alone in the following steps, Solaris would need the complete set of information for regulatory purposes. Therefore, please enter the information about all legal representatives associated with the business.

One of our legal representatives is currently unavailable – do we need to reach them to complete the process?

Yes. All legal representative(s) must be identified in a video identification session to complete the business identification process(BKYC).

Our legal representatives are about to change soon – shall I include the new ones already?

No; please submit the information as it is currently written in the official register. If you already know that these individuals will change, then please inform your Onboarding manager accordingly, and they will help sort things out.

Why do I have to submit all legal representatives here?

As a bank, Solaris is obliged to keep a record about the companies it works with and check whether the provided information is correct. Solaris makes every effort to keep the flow as smooth as possible. Nevertheless, the law stipulates that Solaris must collect this information for all legal representatives.

Ultimate Beneficial Owner FAQs

What is a “Beneficial Owner”?

A so-called “Beneficial Owner” is a natural person (a human) who owns directly or indirectly more than 25% of the voting shares of a legal entity today. Ultimately it is the person who benefits from the entered agreement and has the eventual decision power. It can never be another company, as Solaris would need to look up the owner of that company. There is a more detailed (legally-worded) definition here as well. It may significantly help cases with beneficial owners incorporated as trusts or other non-commercial entity types.

The company has no beneficial owners – how should I proceed?

It might be the case after a thorough investigation that nobody has directly or indirectly enough voting shares of the business. In that case, Solaris is required to take the legal representatives instead. Please enter their information accordingly.

I don't know the ownership structure of the company – how shall I proceed?

Ultimately, the ownership structure of a company is determined in the shareholder agreement (Gesellschaftervertrag), which has been signed at least when founding the entity. In the meantime, this may have changed but would need to be noted in an amendment or update of this contract.

Another company owns the company – what shall I do now?

Please submit the information of the natural person (human) owning your shareholders. If this is also another company (holding- or corporate-structure), you would need to follow the trail of indirect ownership until you either find an individual or the ownership is diluted under 25% ownership (through indirect ownership).

What do you mean by direct or indirectly & how do I calculate that?

Direct ownership refers to a natural person (individual) owning him-/herself voting shares in the business. Indirect ownership refers to somebody owning one entity that then owns a specific part of the business. It also qualifies if the entities are stacked into each other (several companies in between). Also, if one individual holds voting shares via different entities in the business, you would need to add up his/ her total indirect ownership to see whether the total engagement reaches more than 25%. When the shareholding structure is stacked over several hierarchies, you multiply the ownership-quotas of each entity to get the ultimate quota for the respective person.

Example:

Adello GmbH needs to provide its beneficial owners. Adello's shareholders are Peter 30% of shares, Susi 10% of shares, Anne 10% of shares, and Toscana GmbH 50% of shares. Toscana's shareholders: Hugo 75% of shares and Marie 25% of shares Direct beneficial owners of Adello: Peter Indirect beneficial owners of Adello: Hugo with 37,5% of shares (Toscana's share in Adello 50% x Hugo's ownership quota in Toscana 75%). Please note that Marie is not a beneficial owner as she has indirectly only 12,5% in Adello.

We have different kinds of shares – which shares are the decisive ones?

Please refer to the shares with decisive voting power as the beneficial owner is ultimately the person deciding the significant strokes of the company.

Does the UBO need to do something, for instance, sign something or perform a video identification?

No, please only submit the information of that person as stated in his/her official documents (ID card or passport). There is no further double-checking of that information. Therefore, the beneficial owner does not need to do anything during this identification process.