Growing demand for finance, especially tailored products
In the first six months following a management buyout, OnDeck Australia has said its loan originations increased by 43% compared to the previous half-year of 2021.
The small business lender attributes this growth to increased demand for finance across a range of industries and sectors, and the ability to tailor products to the Australian market.
The management buyout, which was completed in December 2021, resulted in three members of OnDeck Australia’s executive team taking 58% ownership of the company. Long-term Australian investors retained 22%, and US-based OnDeck Capital Inc., a wholly owned subsidiary of Enova International, retained a 20% holding,
OnDeck said its Lightning Loans products, which provide small businesses with unsecured funding of up to $150,000, were a key driver of the increase. Before the management buyout, the product limit was $100,000, which OnDeck subsequently increased by $50,000.
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OnDeck Australia CEO Cameron Poolman (pictured above) said the decision to lift the funding limit on its Lightning Loans reflected one of many benefits of the buyout.
He said the small business lender had greater ability to tailor lending products to the needs of Australia’s small business community. Growth in loan originations reflected significant demand for rapid funding across the small business sector, he said.
“We are seeing applications for small business finance across every industry though retail, construction and hospitality are particularly well-represented in funding applications,” Poolman said.
“The common thread is the need for fast lending decisions and accelerated delivery of funds. Lightning Loans offers this, allowing small businesses to take advantage of time-specific opportunities such as discounts on trading stock, refurbishment of premises and engaging new staff in a tight labour market.”
Using a technology-based approach to loan applications, Lightning Loans requires six months of bank statements to be uploaded to OnDeck, Poolman said. Designed in-house, the KOALA Score (Key Online Australian Lending Algorithm) assesses bank statements and uses risk management technology to accelerate lending decisions, without an underwriter’s involvement.
The technology behind the KOALA Score credit assessment allows Lightning Loan applications to be assessed in as fast as one hour, with funds delivered to approved applicants in as little as two hours, he said.
“The bottom line is that OnDeck is giving more small businesses and our broker partners a streamlined application process and rapid delivery of funds, which can provide a critical competitive market in today’s market. We anticipate this will continue to drive further growth in OnDeck’s loan originations,” Poolman said.
Matias Group commercial finance specialist Nick Allen said his small business clients require finance for a variety of purposes.
This includes funding of growth opportunities, to purchase new equipment (e.g. skip bins and trading stock which they couldn’t buy with equipment finance), or simply to take the day-to-day pressure off managing their cashflow.
“OnDeck is always very quick to respond to loan applications, their team is fantastic to deal with and Lightning Loans are proving very popular among the small businesses I work with for the ease of application and rapid access to funding,” Allen said. “It lets business owners get on with managing growth sooner.”
OnDeck launched in Australia in 2015 and is focused on supporting small businesses with access to fast, efficient unsecured finance.
The small business lender offers a wide range of term loans and lines of credit, customised to small business owners’ needs.
