New research by small business lender Prospa has revealed the impact of its small business loans on the nation’s economy.
The report reveals the importance of maintaining cash flow for small businesses to enable Australia’s economic growth with Prospa small business lending supporting 52,500 Aussie jobs and contributes $3.65 bn to GDP.
Prospa undertook the economic impact assessment in partnership with RFi Group and the Centre for International Economics (CIE). The project considered the value of funds lent by Prospa over the period 2013 – 2018 and assessed how funds have benefited Prospa’s customers through increases in revenue and employment and the flow-on effects of these funds to the wider economy.
The results of the research showed:
- Over 80 per cent of customers believe their most recent Prospa loan resulted in an increase in business revenue
- 1 in 4 (26 per cent ) of customers are unsure whether they would be still operating without their most recent loan or believe they would have been forced to close
- For every $1m in lending by Prospa, 57 annual full time employment (FTE) positions are maintained and there is a corresponding $4m increase in GDP
- Since 2013, Prospa has helped maintain 52,500 annual FTE positions, and contributed $3.65bn to nominal Australian GDP
- In 2018 alone, Prospa’s lending helped maintain 24,400 FTE positions and added $1.697 bn to Australian GDP
Greg Moshal, co-founder and joint CEO of Prospa, suggested when small business thrives teh whole community benefits
“This report reinforces how important it is for the 2.2 small businesses in Australia to be able to access funding, the significant role of Prospa in providing that funding, and the flow on impact on the wider Australian economy.
“The analysis shows responsibly managed lending to small business, supported by smart technology and a great customer experience, is having an economy-wide impact.
“We have always celebrated every individual customer as a success story. As the leader in online small business lending in Australia we wanted to quantify our overall impact. The results are greater than we had ever imagined and give us an immense sense of pride.
Prospa co-founder and joint CEO Beau Bertoli suggests the research delivers real insight into the state of lending in Australia and the impact small business has on the economy.
“Our lending is in demand, it’s helping small businesses grow and employ many thousands of Australians – and it will have an even bigger impact as Australians increasingly become aware of alternative lenders.
“The contribution of Prospa’s lending to Australian GDP is in the billions of dollars, and even more incredible is the 52,500 full-time equivalent positions we’ve helped maintain for Australians since 2013. That’s jobs for café staff, shop assistants, tradies, hairdressers and accountants, across every state and territory of Australia. And that number will grow in 2019.”
“Our lending makes a difference and underscores the importance of the Federal Government’s decision to make available $2 billion in loans for small businesses. These funds are critical to support the engine room of the Australian economy – at a time when large banks are tightening their credit policies.”
“It’s clear that fast, simple access to finance for small business has a direct impact on jobs, personal wealth and the wealth of the economy.”
The industry sectors where Prospa’s lending made the biggest impact in 2018 were hospitality, building and trade, manufacturing, retail, professional and other services.
Funds lent by Prospa support a range of business-critical activities. The survey found Prospa customers used an average of 32 per cent of their most recent loan for working capital, 24 per cent for purchasing inventory/stock and 12 per cent to purchase additional hardware such as machinery and tools