Sponsored Article
The way small business owners borrow money has evolved. Alternative lenders are increasingly the best option, thanks to their speed, the simplicity of their application process and convenience compared to the big banks.
How it used to be
Following the Global Financial Crisis in 2008, the big banks tightened their credit policies and became more risk averse. This made it difficult for small businesses to access finance when they needed it.
There are over two million small businesses in Australia and together they account for 70 per cent of private sector employment. Without access to finance it’s difficult for them to create jobs and help grow our economy.
The new financial disruptors
Enter a new wave of lenders who are creating a financial revolution. These alternative or “fintech” lenders, use technology innovations and look at credit in a smarter way. For example, instead of simply looking at the personal credit history of the owner, online providers like Prospa look at a wide range of factors to determine the creditworthiness of the business itself – which means they say “yes” more often and more quickly.
Faster and easier small business loans
Brett Wright, the owner of High Thyme Café, in country Victoria, says his loan from an online lender saved his business. Despite excellent reviews and a loyal clientele, as a sole business owner, simply taking a holiday—to spend time with his daughter—saw Brett’s business struggling to stay afloat.
“I spoke first to the bank I’ve used since starting the business, but they wouldn’t give me the $5000 overdraft we sought. It was pretty much the same story with all the other big banks we approached,” he says.
“At the same time we had a massive equipment failure, and January to February is typically a quiet time for our restaurant. We were almost ready to close the doors and walk away. But then I contacted some other lenders, including Prospa. When Prospa returned my call, I was waiting for the bad news bomb to hit. I nearly cried when they said yes.”
For time-poor small-business owners, sometimes the convenience of the loan process is as critical as the speed.
When New Jersey native and bagel connoisseur, Zev Forman, opened his Melbourne-based 5 & Dime Bagel café, it quickly won fans for its authentic, artisanal bagels. Before long, Zev was flat out supplying other outlets and local farmer’s markets. With rapid business growth came the need for rapid expansion.
After talking to the big banks and finding their processes unnecessarily complicated, Zev turned to specialist small business lender Prospa. Within 24 hours, he had the money he needed. Getting a loan from a bank would have taken “much, much longer,” he said.
FinTech lenders are disrupting the lending space and rewriting the rules. Online lenders like Prospa really understand small business owners and can cater better to their needs, with faster, simpler lending processes and flexible repayments.
Need to fund your small business? Contact Prospa about a small business loan to suit your needs.
This article is provided by Prospa, Australia’s leading online provider of small-business loans.
Brought to you by Anna Fitzgerald, Prospa
