Moneytech has been on a roll this year, with the non-bank, which was already well known for its trade and debtor finance services, seeing explosive demand for its recently launched equipment finance line.
In just a few months after its launch in April, Moneytech’s equipment finance offering has seen a “ridiculous” increase in the number of finance deals.
“We’ve gone from three new clients a month in that product to 60 new clients a month and are growing at 10 to 20 clients every month,” CEO Nick McGrath (pictured above) said.
Read more: Moneytech’s perfect storm
McGrath noted that tracking the line’s success in terms of percentage comparisons has become a bit nonsensical, and he has largely given up trying.
“Because we’re coming off a low base, the numbers look ridiculous. Maybe 3,000% or something like that?” McGrath said.
One reason for the quick uptake was the cross-pollination effect by brokers who were already using Moneytech for trade and debtor finance. Another is that more mortgage brokers are diversifying, with equipment finance often thought of as a starting point for those looking to learn the commercial lending ropes.
“The easiest product for a mortgage broker to learn and sell is equipment finance due to the simplified credit matrix,” McGrath said.
Other factors have also led to what he described as a “perfect storm”: an easy-to-use system, customer credit scores not getting affected by the automated background checks built into the application process, the launch of the product coinciding with accreditation with all of the major aggregators in Australia – thus gaining access to a huge number of member brokers, and the lending amounts available for no-doc applications are higher than at many rivals.
Several lenders cap the amount of a loan that can be issued without any documentation requirements at $150,000. Those exceeding this level at the typical non-bank normally fall into the full-doc bracket, which requires additional financial records, making the application process more onerous.
At Moneytech, no-doc loans of up to $250,000 are allowed for its equipment finance, with full doc after that, up to $2 million.
“We found a bit of a gap… we’re getting a lot of application flow in that $150,000 to $250,000 space. It’s going really, really well for us,” McGrath said.
Moneytech said SMEs clearly have an extra $100,000 funding gap that needs filling in a no-fuss manner, and brokers appreciate any product that cuts paperwork.
Underpinning the continued success of the product line is the funding warehouse secured by Moneytech that will allow the cash spigots to flow freely.
“We set up a funding facility with a big four bank which will give us capacity to write hundreds of millions of dollars’ worth of loans,” McGrath said.
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