Australia’s two million SMEs employ almost 70% of the total Australian workforce and deliver over half of the output of the country’s private sector. Similar to the rest of the world the country’s small businesses’ largest barrier to growth is not being able to access capital quickly enough. According to the Australian Bureau of Statistics small business loan applications are rejected at roughly twice the rate of medium-sized businesses.
“Australia’s small businesses are the backbone of the nation’s economy, yet they face tremendous challenges in accessing capital. Our goal is to fill this gap in the market by providing online business loans to these enterprises that are underserved by traditional banks. Spotcap’s rapid expansion reflects the high demand for fast and flexible financing solutions and the significant growth potential for the alternative lending landscape.”
Spotcap enables small business owners to grow their business by providing fast and flexible financing. The platform will lend up to A$100,000.
The Spotcap Australian managing director Lachlan Heussler said that the company has a proprietary credit scoring system that relies on credit bureau data, as well as access to bank account transaction histories, access to online accounting software and social media content. Heussler added that approvals are completed in just 24 hours.
We caught up with Spotcap in March to speak about the alternative funding scene in continental Europe. The platform is currently active in Spain and the Netherlands. The platform only launched in September 2014 and it provides SMEs with an unsecured line of credit, ranging between €500 to €100,000 in size.
Many alternative finance platforms have moved into the Australian space. Most recently American firm Kabbage partnered with Kikka Capital and OnDeck has also set up shop. The influx of these companies shows the potential in the Australian market. However, this may have a negative impact on the smaller home grown platforms that are just starting up. The companies entering the Australian market have a lot of experience and an operating history. This makes them much more attractive for both borrowers and investors, meaning that we may see some of the smaller platforms struggle to find investors for their platforms.