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An SME lending platform has announced that it will offer guaranteed rates and repayment schedules for small businesses through its AI platform.
Small-business lending platform Lend.com.au (Lend) has announced new guaranteed rates and repayment schedules for small-business loans in collaboration with a “leading online small-business lender”.
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Mortgage Business has asked Lend which lender will be collaborating on the new initiative, but the identity of the lender has not been released.
Lend’s latest initiative, which utilises its LendScore software, is currently in beta testing with direct borrowers but is expected to be made available to brokers in January 2021.
The new rate guarantee is said to be a “market first” as it enables SME borrowers to see the rate and repayment schedule without having to first secure loan approval.
LendScore, which was first released in November 2019, is made up of a predictive modelling software which uses a business’ current performance as the basis for its assessment, as opposed to judging a business based on its historical data and credit. This essentially acts as a pre-approval.
Based on the business’ score, the lender partnering with Lend has said that it will then guarantee the rate and repayment schedule for its small-business loans of between $5,000 and $300,000, bypassing the traditional due diligence process.
Bill Baker, CEO of Lend, commented: “The rate guarantee is a market first in the commercial space and is significant as it’s contrary to standard practice, whereby traditional lenders require loan approval prior to providing the rate and repayment schedule.
“The initiative provides borrower certainty upfront as well as complete transparency of not only the loan but the business’ performance.”
He added: “Ultimately, our goal is to make business funding readily available to help facilitate growth or assist with common challenges, such as uneven cash flow,” he said.
“This is especially the case at this time of year as retail, hospitality, transport and logistics gear up for the holiday hiatus.”
The SME lending platform has reportedly signed more non-bank lenders to its platform, expecting to fully integrate them into the program in early 2021.
Lend increases broker platform network
The CEO noted that Lend had seen an 892 per cent increase in broker registration year-on-year, with a 192 per cent increase in transactions.
According to Lend, the uptick correlates with a 300 per cent year-on-year increase in alternative commercial lenders and corresponding product offering that aligns with the immediate and emerging effects of the pandemic.
The platform also hired its first head of third party earlier this year and grown its broker support team, to help support broker engagement.
“In particular, we’ve significantly extended the platform’s unsecured finance offering to include bringing on board several private lenders, as well as asset finance, line of credit/overdraft, trade/supply chain and debtor/invoice finance providers,” Mr Baker continued.
Lend revealed that it was set to release a suite of new broker initiatives from the first quarter of 2021 that will “continue to focus on supporting brokers with upskilling in commercial lending as well as best practice management by addressing core sales and marketing challenges”.
[Related: More Australian fintechs focusing on lending]
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