A recent investor conversation — and broader discussion in the P2P lending space — prompted us to publish clear answers about our 2024 annual report and our outlook for 2025–2026. Below we explain the negative working capital line, share portfolio quality metrics, and outline what we expect next.
Why the 2024 Annual Report Shows Negative Working Capital
The negative working capital figure does not signal liquidity stress. It stems from a strategic refinancing decision that improves our funding costs.
- In early 2025, declining EURIBOR and better market terms became available.
- We chose to repay €1.4 million ahead of schedule to lock in more favorable financing.
- Because this repayment occurred within 12 months after year-end, our auditor required it to be classified as short-term debt, which made short-term liabilities exceed short-term assets in the report.
In practice, our liquidity is the strongest it’s ever been: we have reduced our average financing cost by more than 2.5 percentage points, and in the first half of 2025 we also raised €0.5 million in equity to further strengthen the capital structure.
On recent market commentary: Some summaries have mentioned “higher debt” at Modena. The reclassification above explains the optics — it reflects timing and classification under audit, not a deterioration in liquidity or leverage quality.
Credit Quality: Conservative and Stable
Our underwriting remains conservative; we do not operate in the sub-prime segment. Loan quality improved in 2024 versus prior years and has continued to improve through 2025.
Key figures (as of July 2025)
- Approximately 4% of the outstanding portfolio is >30 days past due.
- Lifetime default rate ≤ 9%; with about 75% recovery, the net credit loss is roughly 2.25% of issued principal.
- BNPL: ~0.7% lifetime default; with about 80% recovery, losses are effectively negligible.
Portfolio growth vs. credit losses
| 2024 | 2023 | |
|---|---|---|
| Total issued financing | 20 845k EUR | 13 064k EUR |
| Credit loss | 171k EUR | 102k EUR |
The increase in credit losses is primarily a function of a larger portfolio, not a decline in credit quality.
Outlook for 2025 and Beyond
We see no material risks related to working capital or underwriting. The main uncertainty is pace: how quickly we can execute on our growth plans amid a volatile macro backdrop.
Even so, we remain optimistic. With a strong capital structure and prudent risk management, we are positioned to deliver stable, sustainable results in 2025–2026.
Final note. Modena’s 2024 results show that strategic refinancing and conservative risk discipline can go hand in hand with growth. Liquidity is at a record high, and we are ready to capture the opportunities ahead.
