A new small business lending platform, Kikka Capital, has announced that it will launch in Australia.
The company has joined with a US partner. The platform is operated, funded and serviced by Kikka Capital and powered by the US market leader Kabbage, which supplies the technology behind the platform.
“We are extremely excited to be teaming up with Kabbage, the industry leader in automated, real-time underwriting.
“Combining Kabbage’s extensive experience with our small business loan offering is crucial to accelerate our entry into the SME lending market and ensure we stay ahead of the curve in this fast-moving online lending space.
“Recent Reserve Bank of Australia statistics show that about 55 per cent of all businesses with annual turnover of less than $A10 million fund their business development using personal credit cards.
“We see a tremendous growth opportunity in the online lending market as we apply modern technology to make capital more readily available to Australian small businesses and bypass the long, slow and out-dated processes currently offered by the mainstream banks.”
Kikka aims to fulfill a funding need that small businesses have, mainly that it currently takes them too long to access capital. The platform will offer 24 hour access to working capital of up to AUS$100,000 in 7 minutes. Kikka Capital is scheduled to launch in the second quarter of 2015.
“We are delighted to partner with Kikka Capital to launch their online lending product in Australia. We believe there will be significant demand for online small business loans in Australia, and we are confident Kikka Capital is the right partner to put the power of business growth back into the hands of small business owners by providing them with instant access to capital".
Kikka also considers a wider range of data than traditional lenders when making decisions on borrowers. The site leverages Kabbage’s technology platform to collect and analyse small business data in real time.
There is a highly experienced team on the board of Kikka Capital. This includes, Tony Brennan, Chairman, who was previously a partner in an Australian national accounting firm. Jeff McCarthy, Executive Director, was the Managing Director at LC Advisors, a wholly owned subsidiary of Lending Club Corporation. Simon Atkinson, Non-Executive Director, heads the alternative finance sector franchise at Liberum.
The four big Australian banks have 91% market share in the SME lending space, a market worth about $150 billion. But we are now starting to see alternative finance platforms try to break into this market. ThinCats Australia launched in early December 2014 and is a marketplace lending platform for funding SMEs. As well as platforms such as InvoiceBid entering into the invoice financing space. So although there are signs of growth it is still early days for the alternative SME lending space and one of the biggest challenges these platforms face is educating businesses about the alternatives available to them.