OnDeck is a technology-enabled small business lender that can evaluate, approve and fund small business loans as fast as the same day. Headquartered in New York City, the company has originated more than $2 billion in loans to small businesses in more than 700 industries across all 50 U.S. states and Canada.
OnDeck CEO Noah Breslow said, “Australia represents an exciting growth opportunity. Similar to the U.S. market, in Australia we see a huge gap between small business financing needs and the availability of capital from traditional sources. There is significant unmet small business lending demand in Australia, and we believe our online platform is well suited to address the capital needs of Australian small businesses.”
Canstar caught up with MYOB for a Q&A on what makes now the right time to enter the P2B business.
Q: From your customer feedback over the years, what are of the main frustrations small businesses face in gaining access to finance?
A: The needs of the Australian small business community are often overlooked by policy makers, despite their significant contribution to the economy, employment and productivity of Australia. With over two million SMEs in Australia employing more than seven million Australians, it?s no surprise that the health of the nation?s economy needs a thriving SME sector. However, the NSW Business Chamber research found that roughly one third of SMEs felt that they had missed an opportunity due to a lack of credit. The research identified that 55 percent of SMEs were rejected a loan which they felt significantly constrained firm growth; around 21 percent felt that it significantly increased the chances of bankruptcy; and 18 percent had to lay off staff.
Similarly, Deloitte Access Economics (DAE) research found that 200,000 businesses have frequent problems accessing finance which has restricted business owners from being innovative, and reaching their full business potential. Recent ABS data also suggests access to finance is the most common barrier to innovation, affecting around 400,000 businesses and the third largest barrier to general activity (affecting around 300,000 businesses).
Q: What makes now the right time to partner with the P2P industry?
A: Australia represents a strong growth opportunity for the P2P industry. There is currently a significant gap between small business financing needs and the availability of capital from traditional sources, and the financial needs of SMEs are consistently being overlooked. Working with the P2P industry means we will be able to offer easier access to critical funding for capital expansion or working capital. There is no better time to partner with the P2P industry, than right now.
Q: What are the unique strengths that both MYOB and OnDeck will bring to the partnership?
A: OnDeck is a leading US small business lender, and we are excited to partner with such a great company to provide customised solutions for the local market. In doing this, we can deliver a suite of functionality that delivers on our promise to make clients and partners? business lives easier. We want to continue helping small businesses pay their employees; get paid by their customers and now, obtain critical funding to grow their business.
OnDeck expects to start making small business loans in Australia in the second half of 2015. For more information, please visit www.ondeck.com.au.