Westpac has been quietly piloting a partnership with new Aussie online small business lender Prospa for the past few weeks. Prospa – which has so far loaned about $80 million in the past two years now assesses $30 million worth of applications a month.
Banks in Australia almost always require security before lending to small business due to capital requirements. Prospa lends amounts between $5000 and $250,000 to businesses. These amounts would often be too small to be profitable for a bank.
Tonia Berglund, Westpac's product portfolio director of SME business lending, has been talking to all the new online SME lenders that have emerged this year, including US giant OnDeck, which is expected to start lending in Australia this month. Advertisement She said Prospa had been in the local market longer than most and so had built up a good database on business credit history. She said the bank had not formally announced the deal because it was still trialling the approach.