Online lender Spotcap has eye on advisers

by Maya Breen01 Feb 2017
Spotcap announced its launch into the New Zealand market yesterday and managing director of Australia and New Zealand Lachlan Heussler said they plan to work closely with the intermediary channel to establish their operations here, as they have done in Australia.  

“We work heavily with these groups in Australia to the point that it’s our largest distribution channel and we expect that to be the same in New Zealand as well,” says Heussler, speaking to NZ Adviser.

“Intermediated distribution accounts for such a large percentage of residential mortgages both in Australia and New Zealand,” he said, with brokers having that trusted client relationship and offering a more diversified suite of products to their clients. 

“What we’re trying to do is we’re coming in as a preferred lender in a lot of these cases with these groups for their small business commercial loans. So the opportunity for the brokers and the accountants and the insurance advisers is that they can now have a conversation with their clients about financing their small business, where it’s been very difficult for them to finance a small business in the past. We make this application process super easy and super-efficient for them to do.”

He said their introducer counterparties have access to a dedicated partner portal which is live in New Zealand now.

“The application process for the broker is even simpler than it is for the actual end client themselves and the broker can complete two-thirds of the application on behalf of the client. Then they can hand it over to the client to complete the final step and we pay introducer fees to the broker community for those referrals.” 

“We’re really invested in making sure this business works and we’ve got employees on the ground here in Auckland that’ll be travelling a lot around the country, essentially speaking to brokers, accountants, financial planners and insurance advisers about the opportunities," Heussler told NZ Adviser

He said the New Zealand market caught their attention because “Kiwis are very tech savvy and early adopters of technology” and they saw a gap in the market for unsecured small business finance. 

Spotcap’s application is entirely online and in three steps the applicant fills in their basic information on the business and person applying, uploads the business’ financial statements and then connects their business bank account to the Spotcap website. 

Spotcap then downloads all the bank transactions into their database so their credit algorithm can crunch the datasets and the output is analysed by underwriters and risk specialists to make a fast decision for the customer within a 24 hour timeframe. 

First partnership with a bank
The fintech also has partnered with Heartland Bank, which Heussler said is the first bank institution that they’ve partnered with globally as a business.

“We have other equity investors and other debt investors – all of them at this point in time have been based out of Europe.”

It was announced yesterday that the bank has provided Spotcap’s Australian operations with A$20million of funding, which Heussler said is the first step in a larger partnership with Heartland. 
“We’ve got a lot of interest in working with them in New Zealand with regards to funding our balance sheet in New Zealand and we’re also having potential distribution discussions with them about New Zealand as well.”

“The deal with Heartland is significant both in an Australian and a New Zealand context because this is the first time that a bank has actually funded an alternative lender in Australia or New Zealand so that’s a first.

“[The Heartland team] seem to understand where the financial services landscape is headed and embraced the digital distribution mechanisms and players like ourselves in terms of offering next generation financial products for their customers.”

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