Prospa included in Business Finance Guarantee scheme

Non-bank lender Prospa has been added as an approved lender to the Government's Business Finance Guarantee scheme, as ministers open up the initiative to alternative lenders for the first time.

Prospa said the development "demonstrates [the] important role of fintech lenders in boosting the flow of growth capital to small businesses".

The Business Finance Guarantee scheme was launched at the height of the Covid crisis last year to help businesses through the economic downturn.

It comes as Prospa research suggests more than half of NZ small businesses believe it has become more difficult to get a loan.

Strict bank criteria and slow bank processes have been blamed for a lack of uptake for the scheme.

With quicker processing systems, non-banks like Prospa promise to turn around loan applications and dispense funds more quickly than traditional lenders. The firm claims its funds are often transferred within 24 hours.

Adrienne Church, general manager of Prospa NZ, said: "Our inclusion in the BFGS will empower us to support even more SMEs as they look to hire new employees, upgrade equipment, roll out new products and services, and invest in their future.

"The Government’s decision to extend access to the scheme to fintech lenders like Prospa reinforces the important and growing role we are playing in improving the flow of capital to small businesses across New Zealand.

"Our recent research shows that there is considerable pent-up demand, with many small businesses finding it difficult, cumbersome and slow to access funding through traditional banks."

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