Banjo Loans sees 250% increase in loans to healthcare sector

Banjo Loans sees 250% increase in loans to healthcare sector

Fintech SME non-bank lender Banjo Loans has increased loans to the healthcare and social assistance sector by 250% in the past six months, fuelled partially by pharmacy fitouts for new high-tech shops.

Melbourne-based Banjo, which has loaned more than $330 million to over 1500 businesses since its inception in 2015, recorded 60% growth in outstanding loans in FY23 with multiple sectors growing by double digit percentage figures.

Those sectors included healthcare and social assistance, such as pharmacies and retirement villages, as well as nursing agencies, medical specialists and surgeons, childcare providers and pathology and diagnostic imaging services.

Pharmacy owners are one of the main businesses leading the charge for loans in the healthcare sector as they work to modernise their shops.

Recent Federal Government changes allowing for 60-day prescriptions, up from 30 days, is spurring pharmacies to look for more efficient processes to offset the expected drop in revenue.

Banjo Loans CEO Guy Callaghan said pharmacy operators were seeking loans to upgrade their establishments with new technology such as robotic arms for dispensing medication.

“The increasing competitiveness in the pharmacy sector, combined with cost challenges around delivering on the Government’s medication initiatives, has meant pharmacy owners need to seek operational efficiencies,” Callaghan said.

“One way to do this is to incorporate new technologies, like robotic arms, which are programmed to retrieve medications and deposit them into patient-specific boxes.

“This is becoming more common as pharmacists upgrade their shops for the 21st Century.”

Callaghan said SME owners could run into difficulties when seeking loans from the major banks, which is why they turned to non-bank lenders.

“We’re in the unique position where we have the time and expertise to gain an understanding of the fundamental health of established businesses coming to us for loans, which they may not get from the major banks,” Callaghan said.

“Pharmacies perform a vital role in our society, especially as the population ages, so it’s important they can obtain funds when they need it to upgrade their services to meet growing demand.”

Callaghan said it wasn’t just pharmacy owners seeking more loans in the healthcare sector, but also SMEs supplying retirement villages with goods and services.

“We know the retirement sector is also growing and operators, like pharmacy owners, need to refurbish their facilities to accommodate greater numbers of residents.”

Callaghan said Banjo had put on 35 per cent more staff in FY23 to manage the growing number of outstanding loans on its books.

“As reported in our SME Compass Report, small business faces significant challenges this year from inflation, rising supply costs and increasing interest rates,” he said.

“A non-bank lender such as Banjo has the ability to help businesses manage these challenges through lending, which we’re proud to do.”