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NAB has announced a collaboration with fintech lender Lighter Capital in a bid to support fledgling tech-enabled startups access finance.
NAB's deal with Lighter Capital operates on a referral model, allowing tech start-ups to gain access to Lighter Capital’s financing solutions without having to give up board seats, provide personal guarantees, and give warrants.
Unlike other finance providers, Lighter Capital does not take equity from the startups — it, instead, takes a share of monthly revenues over the life of the loan and adjusts monthly payments based on the ups and downs of a company’s performance.
The group provides startup founders tranches of up to $1m of non-dilutive growth capital, with an average loan size of $300,000.
"As we have seen in the U.S. and in Canada, founders are discovering that they don’t have to give up equity to fuel the long-term growth of their companies and that there are financing options that better compliment their exit strategies," said Melissa Widner, CEO of Light Capital.
Ana Marinkovic, NAB’s executive for small businesses, said this will help address the concerns of small businesses, which cite access to finance as one of the major barriers to growth.
"Now more than ever, it’s critical to back Australian small businesses – not only do they bring innovation and competition to our marketplace, they are the backbone of our economy," she said.
"Lighter Capital is a unique offering that provides entrepreneurs the opportunity to keep their equity, board seats and vision intact."
