To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
Fintech lender OnDeck Australia has confirmed it has secured $30 million worth of funding from the government’s Australian Business Securitisation Fund (ABSF).
Administered by the Australian Office of Financial Management (AOFM), the ABSF was announced in 2018 by the federal government as a $2 billion securitisation fund to “significantly enhance” the ability for small businesses to access funds by providing additional funding to smaller banks and non-bank lenders.
SME lender OnDeck has become the latest lender to be allocated funding under the ABSF, after GetCapital was also recently allocated funds.
OnDeck Australia’s chief financial officer Jerry Yohananov, said that the fund was welcome as the COVID-19 pandemic had disrupted a number of wholesale lending markets.
He commented: “As an asset class, small business lending is not well known, and it can be challenging for lenders to secure funding.
“OnDeck has always been able to secure funding – though the question is often what amount, what advance rate and at what interest rate?”
“Having successfully applied for ABSF funding, OnDeck is able to provide more small businesses with the unsecured loan finance they need to achieve growth,” he said, highlighting the lender’s Lightning Loan product.”
Mr Yohananov added that he believes small businesses are more resilient now compared to last year, embracing alternative strategies, including online operations, to survive.
“So, stress levels are significantly lower than they were last year,” he said.
“We believe that when we follow a roadmap out of lockdowns, we will see massive demand among small businesses looking for capital.”
The CFO highlighted that SMEs would be turning to brokers for support, noting that it had seen a significant uptick in demand for small-business loans via the broker channel.
“This trend confirms that small businesses are looking to a trusted adviser for support in their financing journey,” he said.
“It’s great for small businesses, and it is giving more brokers an opportunity to diversify their revenue base through commercial lending.”
[Related: SMEs are top cyber-crime target: ACSC]