Investors and borrowers in Australia have a new platform to choose from in the rapidly growing peer to peer/marketplace lending space thanks to the launch of new entrant Bigstone.
“Having worked in senior finance roles, we saw first-hand how hard it is for small business to get funding. Owners can spend months waiting for a response only to be told that they can only get a loan with increased fees, more paperwork and more collateral. The current system doesn’t work, and after years of listening to small business concerns, we chose to create a solution,” he said.
“We want to return lending to its roots by creating a community where investors come together to fund the best opportunities while also earning a great return. There is so much information available that banks simply aren’t using - Bigstone uses this data to create an honest credit assessment. We then reward borrowers for transparency; so the more information you share, the better your rate will be,” he added.
“Earning a great return is tough in today’s low interest, high share market volatility environment. We’re offering investors an alternative with steady, stable returns at better rates than bank deposits and lower volatility than shares. We’re giving investors access to a new asset class that has traditionally been only accessible to large financial institutions. It’s time to make your money work as hard as you do"
Bigstone claims to offer industry-leading rates and original risk-assessment metrics from banking enhanced with the addition of “new sources of data and proprietary algorithms”.
“The company’s algorithms assess a borrower's creditworthiness, reviews its track record, financial performance and trajectory, as well as the credit profiles of the directors. Each account is then reviewed to uncover patterns that machines can’t and a borrower is assigned a competitive rate between 8-24 per cent,” a spokesman for the company said.
According to research by East & Partners conducted on behalf of Western Union Business Services, 83 per cent of Australian small businesses find it difficult to obtain credit, the highest number recorded globally and more than 70 per cent of SMEs report that lack of credit had knock-on effect on cash flows. However, the p2p lending market is growing rapidly in Australia and is one the largest outside Europe, UK, US and China.
On Bigstone's platform, businesses can apply for loans between $10,000 and $250,000 and get a customised rate estimate within minutes after filling out a 30-minute application. Within 24 hours Bigstone assesses the what it believes to be the creditworthiness of the business and assigns an interest rate.
Investors can add to their portfolio in real time and spread risk by making small loans across many borrowers, industries or geographies. Alternatively, they can fund whole company loans to maximise their returns.