Powered by MOMENTUM MEDIA
subscribe to our newsletter

SMEs look to P2P lending

The SME Association of Australia (SMEA) is developing a peer-to-peer (P2P) lending platform in response to a lack of understanding among SME lenders and brokers.

While the SME lending market has improved in recent years, business finance is by no means readily available and many small to medium-sized businesses struggle to secure finance, SMEA chairman Craig West told Mortgage Business.

“There is a large volume of wealth from business owners tied up in their own business,” Mr West said.

“The problem with that is, they don’t have additional security to secure the lending,” he said.

“They might have a home, but that home is secured already by the bank against their business overdraft or their motor vehicle fleet or their plant equipment or whatever it is.

Advertisement
Advertisement

“So surplus security just doesn’t exist.”

Mr West pointed to Westpac’s recent investment in P2P lender SocietyOne and said the SMEA is looking to develop a similar lender model for business owners.

“I have engaged a consultant to look at it for the SMEA to find out how it could work,” he said.

“We have got the network and we are designing a software system to match businesses up.”

While there remain many technical, legal and compliance issues to be resolved, Mr West said the biggest thing that will work in the P2P lending platform’s favour is the fact small business owners understand small business.

PROMOTED CONTENT


“They understand the cyclical nature of cash flows, which are things that large corporate banks really don’t quite get,” he said.

“Despite all the publicity and what they might say, the banks aren’t very good at it.”

Mr West said the association has already looked at software that could be used as a matching mechanism, and expects a P2P lender service to be available to the Australian SME community in the next three to six months.

 

SMEs look to P2P lending
mortgagebusiness

Latest News

Citi is to exit its consumer business, including mortgages, loans, retail banking and credit card operations, in Australia and 12 other ...

The major bank’s CEO has reiterated that responsible lending changes could simplify the lender’s processes and improve mortgage approv...

The non-major has reported growth in housing lending as well as a rise in home loan settlements via the broker channel. ...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Tackling the home deposit challenge

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.