7 September 2016

The SME roadmap to Oz non-bank lending

We’ve taken the headache out of the burgeoning billion-dollar alternative lending market with this concise roadmap that explains who the main players are and what’s the difference between the lenders.

With non-bank lenders popping up every month to fill the $60 billion gap in business financing, it’s a difficult thing to get your head around. We asked finance expert Neil “The Bank Doctor” Slonim for some direction.

Who are the main players in lending?

There are about 20 established alternative (or fintech) lenders in Australia including (in alphabetical order) Banjo, Bid Invoice, Big Stone, Capify, FundX, GetCapital, InvoiceX, Kikka, LendEx, LendingPost, Marketlend, Max Funding, Moula, OnDeck, Prospa, SpotCap, The Invoice Market, ThinCats,Timelio, TruePillars, Tyro and Waddle.

Tyro offers unsecured business loans based on your settlement history. Tyro Business Loans is ready to use, comes with a flat fee, and no need for collateral.

What’s the difference between the lenders?

Fintech lenders can be categorised in several ways including:

  • How they are funded. Some are funded on a P2P basis while others fund their business like any other company with a mixture of debt and equity.
  • Term of the loans offered. Some only offer short-term loans while others only do two- to three-year terms. Some offer a range of terms.
  • Types of loans offered. Some offer a number of products while others are single product lenders. The latter category include debtor/invoice financiers which is a significant market on its own. Players in this sector include InvoiceX, Waddle, Timelio, FundX, Invoice Market and Bid Invoice.
  • Fixed or not? Whether the loan amount is fixed (with fixed monthly principal and interest repayments) or fluctuating (like an overdraft).
  • Security required. Most funding is unsecured although a few lenders may require a charge over the business. Nearly all of them require personal guarantees.
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