SME fintech lender Prospa has announced ambitious plans to offer an ‘all-in-one’ account for small businesses, with lending, financial management and transactions to be available through one platform.
Prospa, which has been active in the SME lending space for almost a decade, has focussed on line of credit and fixed term lending, but is now looking to expand and, accord to co-founder Beau Bertoli, it was in response to industry and broker feedback.
“Today marks the next phase of our business strategy evolution,” he said. “When we think of the SME owner and, in particular, our finance broker partners, what they’re looking for is an all-in-one solution for small businesses.”
“How do we be more relevant to finance brokers than a point-in-time lending product? How do we start to solve more meaningful challenges?”
“Access to capital is one of the top pain points for small business owners, so that offering is not going away, but what we think is going to evolve is the way that SME access capital and the way that broker partners will be able to solve those customer problems.”
“We’ve seen that through a massive uptake of online products, including Prospa, over the last few years, and we’ve seen a lot of SME owners gravitate towards products that are embedded in other experiences. We want to be a leading, driving force there.”
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According to Bertoli, this new product suite is designed to meet a demand in the market for more centralised solutions for small businesses.
“There’s a trend happening where SME owners operate across as many as 6 different platforms,” he said. “That might use banking software to do basic transactions, then cloud accounting for something else.”
“They might use Prospa for lending, then a bill management platform, and maybe an invoice management platform too.”
“They’re using 4, 5 and 6 platforms to run their business, and we’ve looked at that and said that, while some specialist platforms such as cloud accounting make sense, the financial platforms like cash flow management can be all-in-one.”
“That doesn’t need to be five different platforms. We’ve been following this closely, as more and more SME owners expect to interact with one platform rather than multiple.”
“We think there’s an evolution happening where monoline credit products are going to drift away and it’s going to be the more multiproducts where a customer can do more than access a loan or a line of credit and instead access multiple products, which we see as being cashflow management products.”
Prospa have been in the sector for 9 years and have seen a full fintech ecosystem come and go. Now, Bertoli sees this type of product offering as the next step.
“It’s almost like, five years ago when a lot of fintechs were getting going, there was an unbundling of products,” he explained. “A lot of fintechs specialised in one product. Prospa was exactly this too: we specialised in fixed term products, and more recently we’ve moved into revolving products.”
“We wanted to create a step-change in that, giving SME owners access to one place where they can run the financial side of the business.”
“That includes a deposit account, a card, an overdraft and other credit products. And we want to go further and look at invoicing, and then if you want to factor that, you can do it too. If you have a bill to pay, why can’t you split that across 10 payments: you’ll be able to do that through the platform in the future.”
“If you have employees and want to look at expense management, you’ll be able to issue cards with a set limit and spending control.”
“Then, how do you integrate all that data in a simple way into cloud accounting. That’s the future and it’s what we think SME owners are going to demand from their product providers.
“While Prospa still sees credit as a massive part of our business that isn’t going away at all, we do think the way that products will be consumed, and the expectations from our partners on what product manufacturers need to do is going to evolve and bring it all together in the one place.”
