Over the past few weeks there have been some significant announcements impacting on the Australian SME lending space. This is an area that is experiencing rapid transition as new entrants seek to bridge the gap between the traditional lending models of established banking institutions and the funding needs of small businesses. Whist the ability of Australia’s 2,000,000+ small businesses to quickly access working capital remains a challenge for the industry to solve, changes are coming.
Kikka Capital partners with Kabbage
Western Australian firm Kikka Capital announced that it had entered into a partnership with US SME lending giant Kabbage. Kabbage’s business has a focus on online merchants. It is understood that Kabbage, which has issued loans in excess of US$500 million, will provide Kikka with access to its proprietary online lending platform. This technology is 100% automated and enables Kikka to assess credit applications by quickly analysing relevant data sources in a process reported to take less than seven minutes.
Kikka’s SME lending platform is expected to commence operations in Australia next month. The platform will be accessible 24/7 and provide approved businesses with working capital of up to A$100,000.
Kikka Capital on Vimeo
OnDeck enters Australian Market
Last week NYSE listed online lender OnDeck Capital announced that it was expanding into the Australian market. This move represents OnDeck’s first venture outside of North America. By partnering with prominent business accounting software provider MYOB, OnDeck’s online lending solution will be made available to the one million Australian businesses that use MYOB.
OnDeck CEO Noah Breslow said, “Australia represents an exciting growth opportunity. Similar to the U.S. market, in Australia we see a huge gap between small business financing needs and the availability of capital from traditional sources. There is significant unmet small business lending demand in Australia, and we believe our online platform is well suited to address the capital needs of Australian small businesses.”
Since its inception in 2007, OnDeck has extended in excess of US$2 billion in loans to small businesses in the US and Canada. OnDeck anticipates operations in Australia commencing during the second half of 2015.
Moula increases loans to $50K
In addition to these two new entrants, local fintech startup Moula recently announced that it would be increasing its maximum loan amount to $50,000 (from $20,000 previously). Moula is an online platform that was launched in May 2014 to address the SME funding gap. Similar to the Kabbage tech platform, Moula was founded with the aim to assess applicants’ data in real time to approve loans fast, without paperwork – sometimes in a matter of minutes. A recent report estimated that Moula is currently averaging more than A$100,000 in new loans every week. The maximum loan amount offered is expected to increase over time, as the business continues to grow.
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