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The chief executive of an alternative small business lender says the third-party channel is highly effective in helping businesses access the right capital.
“Approval rates are a lot higher than, say, your direct channel, for example. And that’s progressively gotten better,” Moula co-founder and CEO Aris Allegos told The Adviser.
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Education and awareness about healthy business loans has resulted in small business lending approval rates increasing in the third-party channel.
“What we’ve found is that, if we’ve educated brokers with respect to the appropriate parameters [of a suitable loan], then the bulk of referrals that come into our platform can be fulfilled,” Mr Allegos said.
“In terms of high-level criteria, what we’re looking for is around 12 months of being in business. Another is the minimum revenue threshold... if you’re making $5,000 per month, that qualifies you to apply. And the third is credit quality. But the crux of it is very much [about] understanding time of business and cash flow.”
Mr Allegos said brokers should not “over-engineer the process with a lender”.
“We’ve built platforms that enable us to extract all the data on behalf of the broker… the education piece is very important so they can manage their customers, but not over-engineering it means that they can continue doing what is their core business.”
While small business lending is a “nice add-on”, brokers should continue working on their core business and be mindful of where they refer business, he added.
“The customer’s satisfaction is critical here to ensure the broker maintains the ongoing relationship.”
[Related: New lender to ramp up broker distribution]
