News & Analysis

Peer-to-peer lender RateSetter awarded ASIC licence to expand into business lending

- May 27, 2016 2 MIN READ

Peer-to-peer lending platform RateSetter has today announced that it has received a licence from the Australian Securities and Investments Commission (ASIC) to provide businesses with loans of up to $150,000.

Targeted at established businesses that are looking to grow or expand, the platform will provide loans from retail investors for terms ranging from six months to five years, the first to open the opportunity to lend to businesses up to retail investors.

RateSetter stated the move to lending to businesses follows the evolution of the space in the UK, where the RateSetter group has been lending to businesses for more than five years.

Daniel Foggo, CEO of RateSetter, said the company will provide businesses with a simple, more flexible alternative to bank funding and will be taking a “more holistic approach” to considering loan applications.

“There’s no box ticking at RateSetter, just a personalised approach where we take the time to understand a business’ needs and try to provide the right funding solution,” he said.

“At RateSetter we understand that businesses’ financing needs change over the life of their business, so we offer small as well as larger loans at competitive rates.”

Foggo also highlighted the difference between RateSetter’s loans and those provided by other fintech lenders, with the likes of SpotCap, Moula, and ThinCats also working on the space.

“We are not trying to fill the void in short term funding that a number of other fintech companies are tackling, but instead taking the banks on directly in their core market of longer term secured and unsecured business loans,” he said.

Spotcap, which this week celebrated its first birthday in Australia, announced it has rolled out $11 million in short-term credit lines and loans to SMEs. The startup initially targeted early stage SMEs and launched a loan product last year with a cap of $100,000 with a six month repayment time frame. However, finding that Australian SMBs are larger than those around the world, it increased its loans to $250,000 with a 12 month repayment system.

Unlike RateSetter though these credit lines are provided by financial institutions rather than investors. ThinCats on the other hand provides businesses with loans funded by sophisticated investors, with repayment terms of six months to five years.

RateSetter has appointed Simon Cordell, formerly head of small business risk for American Express in Australia, to the role of head of credit risk.

Foggo said, “Businesses in Australia will now have more options when it comes to financing their growth, and everyday Australian investors will now be able to contribute to that growth. Everyone’s a winner.”

Image: Daniel Foggo. Source: news.com.au