Lending platform CEO: Banks must partner with new technologies to avoid delays in SME funds
The CEO of one of Australia’s fastest and most sophisticated business lending platforms, lend.com.au, warns that banks must partner with new technologies like fast, AI-powered lending platforms to deliver the new Government-backed loans to SMEs, or they will fail to deliver loans before thousands of businesses fold. Having already been converted into a funnel between SMEs and participating lenders, lend.com.au can pre-approve borrowers and match them to a lender within 10 minutes to source the funds.
Lend Capital was founded in 2016 by CEO Bill Baker and Shaun McGowan, who both founded and sold carloans.com.au. The company operates lend.com.au, an AI-powered borrower-facing platform for unsecured business loans by non-banks. The platform assesses the risk of borrowers, profiles them, matches them to a lender, and secures settlement in four days, on average from non-bank lenders. Lend.com.au currently distributes more than $120 million in loan applications to Australian lenders monthly. Using the same capabilities, its broker-facing platform, partners.lend.com.au, is used by a network of 1000 brokers.
On 19 March, the RBA announced that by 16 April, it will make available a facility that will offer $90 billion in funding at 0.25 per cent to authorised deposit-taking institutions if they expand their lending to SMEs over the crisis period ahead. In addition, the Coronavirus SME Guarantee Scheme announced on 22 March and available in early April will see the Government guaranteeing up to $40 billion in new unsecured SME loans issued by lenders. Incentives for SMEs are an initial six-month repayment holiday, no assets required as security, and interest charged only on the component of the funds drawn down.
Anticipating unworkable delays in settlements for SMEs, Lend has adapted its technology for the new loans and is ready to partner with the banks. Rather than approach banks directly, borrowers will complete a 10-minute form on the Lend platform and upload their bank statements. The Lend system will profile the borrower, match their profile to the bank’s credit policy, and automatically send the information to the lender.
CEO Bill Baker explains: “If the banks take the approach taken by our non-bank partners, funds can be with SMEs in four days. In a normal market, the application and settlement process for a business loan by the banks may take up to a month. We anticipate that in the current market, the process through to settlement could take twice as long. This is not a reasonable timeframe in the current market conditions. Thousands of businesses have already been forced to shutter or have lost most of their customer traffic. We are approaching the banks – and any non-bank lenders who are participating in the scheme.
“The product of years of research and fine-tuning, the platform’s efficiency also benefits lenders, who will receive highly qualified customers fast. We are pleased that the Government is also enabling non-bank SME lenders to participate in the scheme.
“The Government is doing what it can to restore the economy to health after the pandemic. Enabling businesses to receive low-rate, unsecured loans, as well as make capital purchases that they can write off immediately, and be subsidised for employee wages if necessary, are good first steps. We are excited to adapt lend.com.au to super-charge this new Government initiative at a time when income and cash flow is critical to businesses.”
