OnDeck passes US$9 billion benchmark globally in online lending

• Australian FinTech adoption outpacing most global markets; sector reaching maturity faster than US experience
• Development of quality online lending industry key to growing Australia’s small business sector; closing credit gap

The OnDeck Group, representing the subsidiaries of the US-listed OnDeck Capital Inc., has announced that it has lent more than US$9 billion to more than 80,000 small business customers in just over ten years of lending.

This figure includes the Group’s businesses in the US, Canada and Australia.  Comparatively, the Australian market is estimated to reach over A$2 billion in annual originations by 2020.

According to Mr Cameron Poolman, Chief Executive Officer OnDeck Australia, while Australia has been a relatively slow fintech adopter, it had traversed the same course as the US market in a markedly shorter time and was likely to reach maturity in less than six years, instead of the twelve years it took in the US.

“As a mature market, US on-line lenders are competing on equal terms with traditional lenders on key metrics,” he said. “Australia is now the second largest alternative finance market in the Asia Pacific region, growing at 37 per cent annually. However, while the total size of the alternative finance market in Australia is now 25 times the size it was in 2013, our market is still an emerging online lending market.”

OnDeck data has shown that, despite the importance of small business to the economy, Australian small businesses needed better financing options but that conditions attached to bank credit put it out of reach for many. One in five Australian small businesses were unable to take on new work because of cash flow restrictions; nine out of ten small businesses said better cash flow could have improved revenue by an average of 11.7 per cent.

As a result, many small businesses were turning to other sources to meet unmet finance demands.  While 66 per cent of small businesses reported they would resort to unsuitable products like personal credit cards to ease cash flow problems, an overwhelming majority of 93 per cent of Australian small business owners who were aware of alternative options like on-line lending, perceived it as a good thing for their business.  Of the 25 per cent of Australian SMEs considering finance in the next year, 33 per cent said they would consider an online lender.