With combined experience in investment banking, risk management and credit modelling, Melbourne-based entrepreneurs Aris Allegos and Andrew Watt decided embark on a startup-style intervention to bridge what they felt was a funding gap for Australian SMEs. These guys are the brains behind Moula, a startup which that functions as an online funding platform for small businesses to access critical short-term capital. Today, the startup has announced that it has increased its loan amount from $20,000 to $50,000, and is currently lending over $100,000 per week to Australian small businesses. Moula also announced the integration of further data sources as it continues its growth into offline lending.
Launched in May 2014, Moula is a tech platform that’s able approve loans fast (even minutes) by processing the applicant’s data. From sources like eBay and PayPal, Moula’s technology has the ability to analyse real-time sales data and performance history, and determine whether the applicant can repay the loan. There is no need for providing any paperwork of waiting for long periods of time for an outcome that could still be ‘no’.
According to an RFI Intelligence Survey (2011), almost 50 percent of SMEs that apply for traditional credit are rejected. The issue is more prominent with online merchants, where a lack of physical presence and limited track record are the two main reasons preventing them from obtaining funds. This is why Moula started off focusing on ecommerce.
The startup now also services bricks and mortar SMEs in Australia in need of instant access to capital that is otherwise unavailable or will take a significant amount time to secure via traditional means. The transition to offline lending has been made possible through several new data integrations. According to today’s announcement, Moula is now able to access financial information from over 50 banks in Australia, and analyse that data to speed up the approval process for SMEs.
“More data sources means that traditional businesses now have the opportunity to access fast and simple financing. In its simplest form, now all you need is a bank account to access working capital,” Allegos.
“Small business lending is evolving and the integration of new data sources means that we can continue to disrupt the traditional lending model. In the past, SMEs have felt the pinch as lenders tighten their belts. Businesses now have the opportunity to access funding in real time, knocking down previous barriers to business growth.”
The co-founders of Moula continually stress the importance of transparency, saying that there are no hidden fees or penalties for early repayment, which is prevalent in traditional loan systems. With Moula, only an interest rate applied against the borrower’s outstanding balance.
On the ‘Pricing’ section of the site, an interested applicant can select the amount of money they want to borrow and instantly find out how much interest they would have to pay in total, depending on which fortnightly repayment option they choose. For instance, if an applicant borrows $4,000, they would be paying a total interest of just under $286. If they borrow $20,000, their total interest comes to just under $1,428.
In a testimonial, Fudge Raco, Director of Melbourne based small business Australian Digital Media Consultants, said he was able to access $50,000 within five hours of application.
“As a small business owner, traditional lenders won’t often help until you’re doing really well financially, at which stage you don’t need the loan – which can be incredibly disheartening” said Raco.
As Moula grows, it’s likely that maximum loan amounts will continue to increase.