Business lending demand an opportunity for advisers

Advisers should be looking to alternative business lenders as banks turn deals away.

Small business lender Prospa says recent research conducted by RFI Global found that over the past six months, 11% of New Zealand small businesses that applied for a loan were declined, while 32% received a smaller loan than they applied for.

"Unfortunately, the lack of funding available to small businesses has the potential to heighten financial stress, and over time possibly impact their growth potential," Prospa says. "The research reinforces these prospects, with almost half (47%) of small businesses reporting they felt more likely to miss opportunities to grow as a result of not being able to access funds."

Proposa New Zealand managing director Adrienne Begbie, says it the demand for funds is far from decreasing, with 47% of Kiwi small businesses now more likely to seek alternative lenders for funding.

In its most recent financial year Prospa NZ saw originations hit $131.8 million, a 57% increase on the previous financial year.

Meanwhile, the ASX-listed parent company has lent more than $3 billion since being established.

The steady demand for funds provides a valuable opportunity for advisers to expand into commercial lending with alternative lenders, like Prospa, who offer simple and fast access to funding solutions that allow small businesses to take opportunities that are often short-lived.

“We’re thrilled with the significant growth we’ve seen in New Zealand, and we continue to see steady demand for funds from Kiwi small businesses," Begbie says.

“It’s regrettable that many small businesses are still finding it difficult to access funds through traditional lenders but affirms the need for alternative lenders like Prospa to support small businesses that are underserved by the market.

“With the borders reopened and Christmas trading season just around the corner, many small businesses will want to jump on opportunities for growth, so now is the perfect time for advisers to start conversations with their clients about our flexible funding solutions.”

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