Founded in Australia and headquartered in Sydney, small business lender Prospa has now set its sights on the New Zealand market and has launched to aggregator NZFSG in Christchurch, Wellington and Auckland.
The lender offers loans of up to $150,000 to small businesses and operates entirely online on a risk-based pricing approach, with no asset security required to access loans of up to $100,000. According to Prospa co-founder Beau Bertoli, the model addresses some major pain points that businesses typically deal with when seeking finance from mainstream banks.
“We started the business on a simple premise to solve a very large problem, which is that small business owners are typically very underserved by the banking system, and they find it incredibly difficult to access capital,” Bertoli told NZ Adviser.
“We’ve built a product that is quite different to how banks look at lending to small businesses – our business is entirely online and cloud-based, and our customers’ experiences are quite different to what you could expect walking into a bank.”
“It can often take weeks and cost money just to get the information you need together, and you could wait 2-8 weeks just to get a response – and that response is often ‘no,’” Bertoli explained. “If it is a yes, the bank usually wants to take security over your family home. A lot of business owners aren’t prepared to put that on the line, so the experience all-round is pretty awful. That’s the problem we’ve tried to solve with Prospa.”
Prospa has now lent over $1 billion with an average loan of about $30,000 in Australia, and has covered almost every region and type of industry, from cafes and retail through to trades. The system allows flexible repayment options depending on the cashflow of the business.
Former Resimac manager Adrienne Church came on board one month ago to lead the New Zealand team on the ground, and says that advisers have responded very enthusiastically to the offering.
Read more: Church secures new role with small business lender
“We’ve gotten really good engagement in the NZFSG sessions, which was excellent,” Church said. “It’s very easy for advisers to get onto our system, and I’ve been astounded by the amount of support that we’ve had. It’s not just about giving them a product; it’s about building their business and helping us build ours.”
“Once we have the borrower on the phone, we can approve the deal in 10-15 minutes,” she explained. “While we talk to them, we get access to bank statements and get approval, and they can have access to the money the next day. The customer experience is quite extraordinary, and the advisers have found it very easy to deal with us.”
“It’s often forgotten that an adviser is also a small business owner themselves, so they can actually empathise with that market on a much deeper level than other sources would,” Bertoli added. “They understand the value of working capital and how hard it is to start, run and grow a business, so we definitely feel a sense of engagement with the adviser network.”
“As a business, we wanted to ensure that we had the right level of local support, and that we weren’t just an international business running the New Zealand presence out of another country. It’s a very big commitment for us.”