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May 2019

Why SME owners are turning to online business lending

May 30, 2019
Capify Australia

More and more SME owners are turning to online lenders for their business loans, and there are some very good reasons for that.

Possibly the biggest reason – the one that leads to all the others – is that online lenders have built their businesses to serve SMEs. They understand their customers, and their products, application processes and approval systems are all designed to meet the needs of small businesses.

So, what can you expect from an online lender?

Access to funds

Getting a bank loan as a small business can be very tricky. Banks have a lot of requirements and don’t like to take risks. If your business is too new or too small, if your credit rating isn’t the greatest or if you have no assets to offer as collateral, the odds are you won’t qualify for funding from a traditional lender.

Online lenders, on the other hand, are much more flexible. Many offer unsecured loans to businesses that have been trading for just six to twelve months. Some are happy to consider businesses with less-than-perfect credit scores (some lenders even specialise in bad credit loans).

The most important factor for any online lender will be your capacity to repay the loan. As long as you can show steady income, it’s likely that you’ll find a lender willing to consider your application.

Easy application 

If you’re imagining page after page of complicated questions – and demands for everything from your full financial statements to your firstborn child – think again.

Online lenders make it super easy to apply for a loan. Most have a quick and easy online application form and ask for little more than your ID documents and bank statements.  

They may ask for electronic access to your bank records – this may sound scary but it’s actually a good thing. They will only have read-only access, and it means your application is assessed in record time.

Bill Baker, CEO of Lend says “Capify was the first non-bank lender in Australia to offer unsecured business loans. Capify has been doing this for over 10 years now and continues to offer a great finance solution to business owners who are in need of finance to grow their business.”

Quick decisions

Unlike banks, online lenders won’t leave you hanging for weeks (or even months) while they contemplate your application. Whether the answer is yes or no, you can expect to have it within around 24 hours. In some cases, you may even get an instant, on the spot result.

And if your application is approved, settlement will follow just as quickly. In fact, you could have the funds you need in your account just 48 hours after submitting your application.

This could be crucial if you need funds to cover an urgent cash flow shortage or take advantage of a time-critical business opportunity.

Great customer service 

In the highly competitive FinTech market, online lenders work hard to attract and delight their customers. Many are SMEs themselves and they understand that you don’t have the time or resources to wade through red tape.

Even though you can quickly and easily apply for your loan online, most lenders will also offer you the support of a friendly human whenever you need it.


Last year, some of Australia’s top alternative lenders worked with the Australian Finance Industry Association and others to develop our new Code of best practice lending principles. This was the first step towards self-regulation and making sure that SME’s can get ‘clear, consistent and accurate information’ about business loan products.

Lenders who are compliant with the new Code – and Capify is one of them – use the new SmartBoxTM tool to provide information about all the loans they offer.

This provides information about each product in the same format, making it very easy to compare the terms and costs of business loans so you can make an informed decision about which loan best suits your needs.

With so many compelling advantages, it’s hardly surprising that more and more SME owners are turning to online business lenders rather than traditional banks for business finance.

There is a cost, of course – unsecured business loans are higher risk for the lender so you can expect to pay more for your business loan than the rates high street banks offer.

You’ll need to weigh the costs against the advantages, so be sure to get professional financial advice before you apply for a business loan.

This article was supplied by Lend

Or call 1300 760 930 to speak with one of our friendly Lending Consultants now.

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