There’s competitive tension in the burgeoning small to medium enterprise online lending market, as new players enter the Australian attempting to acquire customers turning away from the big banks.
These new providers are disrupting the traditional lending model which as the online compete to give small businesses access to finance.
Bigstone, a fintech marketplace lender, announced today the launch of simple, fast and fair funding, offering the best small business loans in Australia.
“The current system doesn’t work, and after years of listening to small business concerns, we chose to create a solution,” said Bigstone founder and CEO, Boyd Pederson.
Bigstone was kickstarted by a group of finance industry experts who saw the future of finance in the smart application of technology to cut out the banking middleman to directly connect borrowers and lenders in a safe and secure lending marketplace.
The lender says they are working to deliver the most competitive small business lending rates in the country for creditworthy small businesses.
According to Bigstone, research shows that 83% of Australian small businesses find it difficult to obtain credit, the highest number recorded globally and more than 70% of SMEs report that lack of credit had knock-on effect on cash flows*. This is particularly relevant to small business owners, who list cash flow as their biggest concern.
“Having worked in senior finance roles, we saw first-hand how hard it is for small business to get funding. Owners can spend months waiting for a response only to be told that they can only get a loan with increased fees, more paperwork and more collateral.”
“We want to return lending to its roots by creating a community where investors come together to fund the best opportunities while also earning a great return. There is so much information available that banks simply aren’t using. Bigstone uses this data to create an honest credit assessment. We then reward borrowers for transparency; so the more information you share, the better your rate will be,” said Pederson.
Westpac Banking Corp’s venture capital fund Reinventure has also announced today that they have invested in Valiant Finance, a broking platform for small businesses that pairs borrowers to online lenders.
The online lenders appearing on Valiant include Moula, Prospa, Kikka Capital, MaxFunding, SpotCap, Marketlend, Timelio, Banjo, Thin Cats, InvoiceX, Get Capital, Crown & Gleeson, Earlypay, Business Fuel and Capital Finance.
“The big four banks have market power and are typically the first point of contact for small business credit inquiries, while the voices that can afford to shout the loudest are often the most expensive and not always the best option for a client,” said Valiant co-founder Alexander Molloy.
Earlier this month, NAB also responded with the QuickBiz Loan which will be available at 13.85 percent fixed interest rate with no setup or monthly fees, to business applicants that have been in operation for at least a full year. Eligible business types are sole traders, partnerships (with two or less partners) and private companies with less than two directors.