Funding structure enhances small business growth capabilities

OnDeck Capital Australia (OnDeck), a subsidiary of the US-listed OnDeck Capital, today announced it will expand availability of its equipment finance solution, representing another example of how fintech lenders are successfully identifying and filling the small business funding gap.

Mr Cameron Poolman, Chief Executive Officer of OnDeck Australia, said brokers often speak to OnDeck about the challenges they encounter obtaining traditional finance solutions for non-primary assets.

“These include assets such as catering equipment, gym equipment, racking, IT, food processing and fit-outs, which mainstream financiers will not finance because of the asset type or its age, says Poolman. “Currently, to purchase these types of assets, many small business owners must resort to using their valuable working capital or turn to family and friends. Often the purchase simply doesn’t happen and that limits the development or even the ongoing operations of the business”.

Mr Poolman said that what distinguishes OnDeck funding solutions from traditional lenders is its focus on the future potential of the business.

“We want small business in Australia to succeed. To do this, we must support and invest in solutions for them. Our focus is on a small business owner’s overall financial health, and not just purely on the short-term resale value of its business assets. As such, our equipment finance solution places no maximum age restrictions against any asset class. It provides small business the finance to purchase necessary equipment, frees up cash and gives owners more opportunity to focus on what’s best for their business.”

OnDeck’s research has shown that one of the main reasons small business borrow from on-line lenders was to buy equipment.

“Our strength is our technology and the data and analytics we’ve sourced from lending more than US$10 billion to customers globally,” says Poolman. “Through our data, we know around 32 per cent of our customers use our loans to purchase equipment. Additional feedback from our brokers and their customers indicates they want business equipment loan products with longer-term amortisation to match their financing costs to the lifespan of the equipment, which usually extends beyond 12 months,” he added.

Mr Poolman noted OnDeck had used its expertise to quickly develop a solution that met broker and customer requirements by specifically designing a product better aligned with the expected ‘useful’ life of the financed asset within the business.

“The disrupter sector is evolving and maturing much faster, says Poolman. As a result, OnDeck Australia is uniquely positioned in the market to respond to customer demand with smart, agile, innovative products that can build a more level playing field in terms of access to capital for small business.” Key features of OnDeck’s new product are:

• an amortisation benefit that will ease cash flow restrictions within the business, and in turn increase revenue and potentially create a pool of freed-up cash that can be used in other ways to grow the business

• a quick and simple application process, requiring only six months of bank statements

• a preparedness to consider financing assets without imposing age restrictions; traditional lenders are typically focused only on primary assets

• the certainty of owning the equipment at the end of the contract compared to the uncertainty of a rental or Operating Lease The term loan is secured against the value of the equipment and its potential to generate ongoing revenue.

The term for OnDeck’s product ranges from 24 to 48 months for amounts from $10,000 to $100,000.

For more information, please contact:

Sue Morey – OnDeck Australia


Mobile: +61 409 746 385