Small business lender OnDeck is highly optimistic that Australia’s small business community will flourish as the economy regains momentum and businesses require credit to maximise potential.
Launched in Australia in 2015 to assist small businesses access capital, the lender uses cutting-edge technology to evaluate clients based on their business’s performance, not on business owners’ personal credit scores.
OnDeck Australia CEO Cameron Poolman (pictured) said SMEs had to pivot quickly throughout COVID as market conditions in the small business finance space were changing.
“The back end of 2021 saw an impressive uptick in demand for OnDeck’s unsecured small business lending products. Loan originations were over 50% higher in November and December 2021 compared to the four previous months, and we believe additional tailwinds will contribute to further growth in 2022,” Poolman said.
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The main sectors seeking finance from OnDeck include construction, accommodation and food services, retail trade, professional services (legal, IT and consulting) and manufacturing.
Poolman said moving into small business lending may take brokers outside of their comfort zone.
“It is not necessary to have extensive experience in small business lending to grow a revenue stream successfully,” he said. “It adds diversity to a broker’s business and revenue stream, which makes sense as we see property market growth begin to slow.”
Brokers could learn OnDeck’s processes quickly through its ‘hi-tech, hi-touch’ philosophy – its experienced BDMs were available to walk a broker through the businesses loan process.
“OnDeck also provides a partner portal giving brokers access to free marketing tools, including flyers and template copy,” Poolman said.
“If brokers want to send out an email promoting small business lending, OnDeck can provide a ‘send ready’ design complete with the broker’s logo and brand colours with brokers free to choose from several generic or industry-specific templates.”
In February, OnDeck was the subject of a management buyout and is now led by an Australian management team which has taken over the US controlling interest.
Poolman said being led by an all-Australian team was good for brokers.
OnDeck recently introduced its Lightning Loans platform, providing more opportunities to align with small business owners and the broker channel to deliver fast, efficient unsecured lending solutions.
Poolman said 2022 is an opportunity to focus and improve on OnDeck’s unsecured short-term lending products and migrate lending operations onto a new customer platform which will provide a better user experience and more efficiencies for brokers.
Read more: Management buyout at SME lender OnDeck
“Also, we will continue to focus on our established processes such as Lightning Loans, with plans to enhance them, and extend our repayment terms out to 36 months,” he noted.
“Already, we are able to decision loans in as fast as 30 minutes and offer funding up to $150,000 in as fast as two hours, so this level of unsecured funding is among the fastest (if not the fastest) in the market.”
Poolman said it was critical for small businesses to have the cashflow in place now to invest in the staff, inventory and equipment needed to make the most of the economic rebound.
“Small business owners are notoriously time-poor, and many will turn to a broker for support organising finance,” he said. “This is especially the case as we know one in four of a broker’s home loan clients are likely to be small business owners, so there is already a trust-based relationship in place.”
OnDeck wanted brokers to assist small business clients by exploring finance options that delivered rapid access to funding when they needed it.
“This is particularly important at present as we anticipate many small businesses will want to invest in new plant and equipment to take advantage of temporary full expensing ahead of June 30, 2022, which provides brokers valuable opportunities between now and EOFY,” Poolman said.
