A nationally-awarded fintech lender has predicted another strong year of growth for the alternative finance sector, highlighting several specific trends that point to its continued success.
To date, Prospa has lent $1.2bn across the Australian market to around 20,000 small business customers. In 2019, the fintech brought several tier one, big four Australian banks into its debt funding structure.
“That was a real moment of maturity for the industry, seeing the institutional banks are now prepared to put hundreds of millions of dollars into this type of product category,” said co-founder and co-CEO Beau Bertoli.
However, the development was not only exciting for Prospa, but has industry-wide implications.
According to Bertoli, “There’s a lot more momentum exiting 2019 than there was exiting the year before. A lot more parties are talking about alternate finance products, fintech, working capital solutions and so forth, given the work we’ve done, along with other lenders in the space, media agencies and advocates for this sector."
Head of partnerships Alex Brgudac expects Prospa – and the fintech sector as a whole – to continue to “become more mainstream”.
“The last two years we were recognised through the MFAA as fintech lender of the year – and the category didn’t even exist before that," he said.
“We’ve only been around a short time, but we’re having an impact and the industry recognises that. Our team is really proud of the fact we’re stacking up against organisations that’ve been around for a century or more, and flourishing. I just see it growing from there.”
The increasing acceptance of and reliance on alternative finance will cause offshoot developments that carry even further into the market, according to the Prospa execs.
“The big trends for 2020 are going to be around product choice. There are a lot more products coming to market now, which is another sign of the maturing of the industry – accepting that small business owners don’t have one use case and need multiple products to support their businesses," said Bertoli.
“This makes it easy for a finance broker profiling a customer’s needs, being able to offer a solution that has more than one product.”
Directly related is the consolidation already evidenced in the industry and expected to carry into the coming year.
“We’re seeing some of the larger aggregator groups starting to come together and more takeovers happening,” said Bertoli.
“I think in the product spectrum as well, there’ll be more consolidation from the product manufacturers starting to happen. We haven’t seen much acquisition activity in the product side but, we should start to see companies coming together to try to get more scale.”
