As of Tuesday, more Europeans have entered the Australian SME Lending Market, this time with Spotcap now open for business. Last year we saw the launch of Ratesetter and ThinCats, with Ratesetter focused on pure P2P consumers and ThinCats on secured business lending. So yesterday I sat down for a coffee with Lachlan Heussler the MD of Spotcap Australia, to talk a little about his plans and particularly to get on understanding of the features that Spotcap is offering to Australian Small Businesses.
Lachlan has a background in investment banking with Citi, Deutsche Bank and UBS. Though for the last 5 years, he has been helping to bring several smaller start up businesses to market. After recognising the growth opportunities for the Australian SME lending, he flew to Berlin and met with senior Spotcap management. Spotcap was started from the German internet company Rocket Internet SE. Rocket Internet SE builds online startups and owns shareholdings in various internet companies, including Dafiti, Foodpanda, HelloFresh and Spotcap. The on-line lender has offices in Berlin, Madrid, Amsterdam, London and now Sydney.
As of the 26th May, Spotcap Australia began offering unsecured lines of credit up to $100,000 for no longer than six months for Small Business Loans. The offering is interesting in that it requires
– no directors or personal guarantees
– free to have credit line approved
– 100% online application process (no paperwork)
– risk based pricing (each individual applicant scored on their own credit)
– 24 hour underwrite turnaround if all data requirements met
– money drawn against the credit line becomes an amortising business loan, payable back over 6 months via direct debit
– clients can pay loans back early without penalty
– small origination fee on drawdown loans
All that Lachlan and their team require from the business seeking finance – is that it is registered in Australia, they have 12 month operating history, a minimum $50k annual turnover and an on-line bank account.
Unlike a number of other Marketplace lenders Spotcap has its own funding and make their own lending decisions via their European Credit model tailored to the Australian market. With other international SME lenders already or about to open soon – Kikka/Kabbage, OnDeck, Thincats and domestic players such as MarketLend who are currently lending, it will be really interesting to see how Spotcap performs over the next 12-24 months.
With the exception of ThinCats these new players seem to be targeting what I would see as the “soft spot” of the Australian Banks lending business. That are loans less than $200k and durations of no more than 6 months. Loans and relationships that are costly and time constraining for local banks to service. The marketplace lenders don’t take the banks head-on, they solve a problem for the banks. A really smart strategy if you ask me.