An accountant’s guide to comparing Fintech business loans
How can you objectively compare the loan pricing metrics between the different online business lenders and make the most informed decision possible?
Assisting your small business clients with finance can be challenging with so many options out there from both banks and newer alternative finance providers.
As traditional lenders have tightened their credit conditions and pulled back on SME lending, the rise of online, fintech lenders is providing small businesses with new opportunities to fund their growth.
However, how can you objectively compare the loan pricing metrics between the different online business lenders and make the most informed decision possible? The answer is with SMART Box™.
The SMART Box™ Loan Comparison Tool empowers accountants and borrowers to better understand and assess the cost of small business financing by disclosing standardised prices.
In June 2018, a group of leading online lenders signed the Australian Finance Industry Association Online Small Business Code of Lending Practice (‘Code’), which aimed to make it easier for borrowers to make informed decisions about their finance options and increase transparency and disclosure standards across the Australian online business loan sector. The code was created through collaboration with the Australian Small Business and Family Enterprise Ombudsman Kate Carnell, FinTech Australia, and small business advocate, theBankDoctor.org.
SMART Box™ stands for ‘Straightforward Metrics Around Rate and Total cost’ and is included in all business loan offers from online lenders compliant with the Code.
The one-page comparison tool includes clear and consistent pricing metrics, calculations and metric explanations. It discloses the Total Cost of Credit, Average Monthly Payment, the Annual Percentage Rate (APR), and more.
SMART Box™ makes it easier for accountants to clearly identify if a financial product is right for their client’s needs, exactly how much it is going to cost and if a product is the best solution available to them.
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