Prospa calls for extension of business loan scheme

The Aussie-based SME lender is one of five non-banks to be granted access to Australia's equivalent scheme. 

It wants the NZ government to include non-banks in its scheme, to help deal with the impact of the Covid-19 crisis. It believes non-bank can help to distribute funds more quickly to businesses.

Currently, businesses can only access the government's $6.2 billion loan guarantee scheme through traditional lenders. 

Businesses with turnover of between $250,000 and $80 million are be eligible for loans of up to $500,000, for up to three years. The government will take on 80% of the risk of the loans.

Prospa, led by former Resimac NZ boss Adrienne Church, believes non-banks, "can quickly distribute new loans to small businesses that have traditionally been unable to secure bank funding".

The company said: "By extending access to the NZ Scheme to non-bank lenders such as Prospa, the New Zealand Government could improve access to essential working capital for more small businesses facing cash flow challenges due to Covid-19."

Adrienne Church, Prospa New Zealand's general manager, said: “Access to the Australian government’s scheme will enable Prospa to support thousands of small businesses facing cash flow challenges and we want to be able to do the same for those New Zealand businesses doing it tough."

Greg Moshal, CEO of ASX-listed Prospa, added: "We strongly urge the New Zealand Government to enable lenders like Prospa to access the NZ Scheme alongside the banks. The more access small businesses have to working capital, the better it is for the economy.”