Demand shifts to line of credit

IN Partnership with

Prospa’s Business Line of Credit product in New Zealand has solidified itself as a popular choice, acting as a crucial safety net for businesses during uncertain economic conditions

LOOKING BACK, it was clear that New Zealand had a strong need for Prospa’s products. Adrienne Begbie, managing director at Prospa New Zealand, reflects on Prospa’s game-changing introduction to the SME lending space in this country: “Speed was at the core of what we brought to the market in 2019. Small business owners have always been time-poor, and our tech reduced the business loan application process to minutes, with funding possible in hours. “Back then banks were the only option for most small businesses that needed finance, and the weeks it took to approve loans really held back the potential of small business.” The ability to quickly access much-needed funds led to business growth for many SMEs, which in turn fostered strong loyalty. “We did business lending like no one’s ever

Prospa is a leading fintech company with a commitment to unleashing the potential of small business in Australia and New Zealand. It does this through an innovative approach to developing simple, stress-free and seamless financial management products and services. Since 2012, Prospa has provided over $4 billion of funding to support the growth and operations of thousands of small businesses. Prospa works with more than 16,000 trusted brokers, accountants and aggregator partners to deliver flexible funding solutions to their clients.

Find out more

“Five years in, with over $500 million in funding delivered to over 10,000 small businesses in New Zealand, and $4 billion across ANZ, we’re going from strength to strength alongside our partners. And we’re just getting started”

Adrienne Begbie, Prospa New Zealand

done it before in Australia and New Zealand, and 70% of customers came back for more funds as they scaled up,” Begbie says. Early on, it was clear that advisers saw the value in Prospa’s offerings too. “Technology may have been the key to the speed we were able to deliver, but we knew small business owners wanted to work with trusted advisers, so we committed to forming partnerships with advisers and aggregators,” Begbie adds. Today, close to 70% of settlements in New Zealand originate from the adviser channel.

Business lending via non-banks has steadily increased over the five years that Prospa has been operating in New Zealand, from around 4% of all business lending at the start of 2019 to nearly 7% today. “Five years in, with over $500 million in funding delivered to over 10,000 small businesses in New Zealand, and $4 billion across ANZ, we’re going from strength to strength alongside our partners. And we’re only just getting started.”

When the Prospa Business Line of Credit launched in New Zealand two years ago, it was clear that some businesses needed extra support in navigating the pandemic economy. This need has persisted post-pandemic as high interest rates and weak consumer sentiment continue to exert pressure. The Business Line of Credit filled a gap in the market for customers wanting to invest in their businesses, while also serving as a safety net. Customers only pay interest on the amount they draw down from the Business Line of Credit, but the facility can serve as a safety net for businesses during uncertain economic conditions. “Just knowing that they’ve got the money there has been hugely successful for our customers. About 55% of our business from the adviser channel is for the Line of Credit product, showing growing demand.”

The proposition of the Business Line of Credit product in New Zealand has solidified itself as a popular choice for small businesses looking to bridge the gap between stock purchases or late payments, or to have a safety net for unexpected expenses. Advisers offering the Business Line of Credit have found a winning formula ushering in further demand. “Our Line of Credit product is really resonating with the market, and we know there is demand for higher facility limits from our early-adopter advisers who are selling the product,” Begbie says.

Prospa’s Business Line of Credit paves the way post-recession

Published 29 Jul 2024

Companies

People

Newsletter

About us

Authors

Conditions of Use

Terms & Conditions

Sitemap

RSS

Resources

News

Specialty

Best in Mortgage

Mortgage Industry

News

MORTGAGE INDUSTRY

BEST IN MORTGAGE

SPECIALTY

Resources

Companies

People

Newsletter

About us

Authors

Conditions of Use

Terms & Conditions

Sitemap

RSS

News

MORTGAGE INDUSTRY

BEST IN MORTGAGE

SPECIALTY

Resources

Companies

People

Newsletter

About us

Authors

Conditions of Use

Terms & Conditions

Sitemap

RSS

“Our Line of Credit product is resonating well with the market, with our advisers getting lots of business with the product”

Adrienne Begbie, Prospa New Zealand

“We’ve always prioritised understanding our customers’ needs. Being customer obsessed isn’t just a goal for us – it’s a core value that we truly live by,” Begbie says. “We listen to what our customers want and need, and we adapt our products accordingly.”

IN Partnership with

Unlimited drawdowns throughout a 24-month term, with the option to renew No asset security required up front to access funding up to $150,000 Only pay interest on the funds you use Check your balance, make repayments, and draw down 24/7 through the mobile app or online portal Pay Anyone feature – pay suppliers or add payees directly from the Prospa App or Prospa online Integrated with Bill Pay to easily manage and pay bills in one place Option to cancel the Line of Credit at any point in time with no added costs

Business Line of Credit features

Facility limit: $50,000 Term: Renewable after 24 months Repayments: 1% of drawn principal + interest (charged daily) direct-debited weekly Rate: 0.07% calculated daily (on drawn-down amount only) Weekly service fee: 0.046% per week or 2.4% annually based on facility limit – amounts to $23 per week

Scenario*:

$20,000 drawn down from a $50,000 facility limit

Weekly repayment breakdown

1% of drawn principal Assuming $20,000 drawn down

$200/week

*Please note this is an indicative guide only, where the actual values may vary slightly

A Prospa Business Line of Credit in action

Interest on drawn amount Based on daily rate of 0.07%

$96.05/week

Weekly fee 0.046% of facility

$23/week

Total weekly repayment

$319.05/week

Scenario*:

$20,000 drawn down from a $50,000 facility limit

Weekly repayment breakdown

1% of drawn principal Assuming $20,000 drawn down

$200/week

*Please note this is an indicative guide only, where the actual values may vary slightly

A Prospa Business Line of Credit in action

Interest on drawn amount Based on daily rate of 0.07%

$96.05/week

Weekly fee 0.046% of facility

$23/week

Total weekly repayment

$319.05/week

Scenario*:

$20,000 drawn down from a $50,000 facility limit

Weekly repayment breakdown

1% of drawn principal Assuming $20,000 drawn down

$200/week

*Please note this is an indicative guide only, where the actual values may vary slightly

A Prospa Business Line of Credit in action

Interest on drawn amount Based on daily rate of 0.07%

$96.05/week

Weekly fee 0.046% of facility

$23/week

Total weekly repayment

$319.05/week