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The need for small- and medium-sized business loans in Australia continues to gain traction. And Sydney-based Prime Capital is getting in on the action.
This week, the non-bank commercial lender quietly rolled out a new offering called "business jumbo loans," or business loans between $5 million and $25 million. Interest rates start from 8.64%, with a 75% loan-to-value ratio and 24-hour approval cycle.
"We’re making large-scale funding more accessible," Steve Sampson (pictured), chief executive officer of Prime Capital, told Australian Broker.
Sampson said that increased regulatory scrutiny has made the process of obtaining traditional banks loans for some businesses more gruelling than ever. But it's also created a gap in the market for slightly larger business lending opportunities.
"We're seeing the banks getting tighter; it's harder to jump through the hoops at the banks to get financing," Sampson said. "It's something we do well. Small businesses need cash. But they need speed as well. We can get borrowers money very quickly, whereas the banks are notoriously slow to get the deals done.
"We lend to people who just don't quite get through the hoops that the bank wants them to get through, maybe because they haven’t prepared their last two years of tax returns or something," he said. "We look a bit deeper into the deal and look to support the business. It's a stratosphere that few of us are playing in."
Yet, despite the relatively small number of players in the market, the white space for funding — and need for lenders in the market — is growing. As of June 2024, there were more than 2.6 million businesses in Australia, an increase of about 2.8% from the previous year, according to the Australian Bureau of Statistics. And small businesses make up roughly 97% of all businesses in Australia, according to the Department of Treasury.
Prime Capital, which has been around for 25 years, offers a number of commercial loans and loans to small- and medium-sized enterprises (SMEs). Sampson said the new business jumbo loans are part of the firm's broader strategy to expand in the year ahead. The products, which Sampson described as "fitting hand in glove with SMEs," will launch over the next two quarters, including some highly-anticipated construction loans.
Sampson, who said Prime Capital works exclusively with brokers, added that, "2025 is shaping up to be a stellar year for commercial finance, and we are primed to help our brokers seize the opportunity and grow their share of the market.”
