SME envelope: the government supports P2P, the new loan offer of the NAB
The government invested in two small business lenders, while NAB introduced a new SME loan.
The Australian Office of Financial Management (AOFM), through its Australian Business Securitization Fund (ABSF), made two new investments.
It injected more than $ 100 million into two SME lenders – $ 87.5 million in GetCapital and $ 30 million in OnDeck, a peer-to-peer provider.
The government also provided $ 46 million to GetCapital in November 2020, via the âStructured Financial Support Fundâ.
This is also ABSF’s second round of small business funding after injecting funds into Judo Bank in April 2020.
On Wednesday, NAB announced a new SME loan offering up to $ 2 million over 30 years – a first in Australia.
For loans secured by commercial property, the maximum loan-to-value ratio is 80%, while with a residential back-to-back it can reach 100%.
The âFastTrack Business Loanâ has an advertised interest rate of 2.45% per annum, set for three years, with applicable eligibility criteria.
Ana Marinkovic, head of a small business at NAB, said it was a one-off offer.
âSmall businesses are the lifeblood of Australia’s economy,â Ms. Marinkovic said.
“The terms of the loan give them the opportunity to make a pragmatic decision between potentially paying rent or buying and owning their premises.”
SME loans rebound
A Home Market Reserve Bank document released Thursday shows a rebound in small business lending from the depths of the economic crisis caused by Covid in 2020.
“After a period of relatively weak funding demand last year, the bank liaison suggested that there had been a growing appetite for corporate borrowing in the run-up to the recent shutdowns,” the banks said. authors of the article.
âMore recently, surveys of small businesses indicate that accessing finance has become less difficult since mid-2020, partly reflecting improved economic prospects.
“In line with this, the banks have said in liaison that they are looking for more business lending opportunities, including small businesses.
“This follows a tightening of access to finance in early 2020 and longer than usual loan approval times as banks have become more cautious about lending to new customers and affected sectors. .
âAt the same time, banks were dealing with operational constraints due to a higher volume of customer inquiries.â
Bridge loans are on the rise
Specialist lender TechLend has announced that it has reached $ 100 million in bridge loan applications after launching just a few months ago.
Bridge loans âbridgeâ the financing gap between the sale of the home and the purchase of a new one.
CEO Aaron Bassin (pictured left, with co-founder Nick Jacobs) says the lender is filling a significant gap in the home loan market.
âWe are seeing borrowers capitalize by buying new property before selling their existing property and avoiding months of life time situations and crushing mortgages,â Bassin said.
“It is a suitable solution for all homeowners, including those who may not meet the strict lending criteria required by the big banks.”
TechLend offers borrowers same day pre-approval, with an installation cost of 1.99% for the first 90 days.
The loan technically does not earn any interest for the first three months, except for a âfeeâ of 1.99%.
After this period, an interest rate of 5.99% pa applies (comparison rate of 6.25% pa *), which is 50 basis points more than when the brand was launched in July.
Up to $ 3 million is provided as short-term financing with an LVR of 75%, with loan terms of up to six months.
Photo by Christina Hawkins on Unsplash