It says this is an “early sign of resilience” in the small business sector
Small business lender Prospa has seen support requests from customers return to pre-COVID levels this month, with 18.6% of customers on full deferrals returning to their regular repayment schedules as of 4 June.
Prospa says the small business market is showing “early signs of resilience,” with the most affected sectors being tourism businesses, cafes, beauticians, gyms, food and drink outlets and clothing retailers. 2,731 customers (19.9%) have remained on a partial repayment arrangement, and 1,749 (12.8%) are still on full deferrals.
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Prospa’s own performance was impacted significantly by COVID-19 throughout April and May, partly due to the relief measures implemented for customers across Australia and New Zealand. 5,501 Prospa customers currently remain on relief packages including reduced repayments, and short-term payment deferrals.
CEO Greg Moshal says Prospa was in a solid financial position going into the crisis, with the March quarter producing $122.8 million total loan originations, and $37.4 million in revenue.
“I’m really proud of how quickly the team dedicated themselves to providing the highest level of support to our customers and partners during COVID-19, while also dealing with the impacts on their own lives,” Moshal said.
“As our third quarter results demonstrate, Prospa was in a strong position going into COVID-19 which allowed us to react quickly and adapt to the new operating environment.”
“As a company we continue to closely monitor conditions and our data for evidence of the recovery and we’re encouraged by the green shoots we’re seeing with our customers as they get back to business,” he continued.
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“Almost one in five of our customers who originally requested relief are already in a position to resume full repayments.”
Prospa has lowered its operating expenses by 32% compared to the prior quarter, and has adjusted its underwriting parameters and credit assessment model in response to the challenging environment. Moshal says this will help Prospa further support businesses as they move towards operating at more normal levels.
“We have used this time to focus on preserving our capital so we are now well placed to support small businesses as they start to return to work,” he stated.
“Our enhanced credit model will allow us to identify and support thousands more Australian and New Zealand businesses who are looking not just to survive, but to prosper, as they emerge from Government restrictions.”
