How commercial brokers can help their clients get to the end of lockdown

by Mike Wood17 Sep 2021

SME fintech OnDeck has launched a new scheme to help commercial brokers to get their clients through to the end of the ongoing lockdowns via repayment holidays.

OnDeck will be offering 4 weeks off repayments to new and existing customers, allowing them to regroup and plan to build back better once restrictions lift ahead of the crucial Christmas trading period.

“Small businesses are currently heading towards the peak trading period of the year – an event that typically calls for an investment in stock, headcount and marketing spend,” said Cameron Poolman, CEO of OnDeck.

“This year, many small businesses that are likely to do well over the festive season have had their cashflow impacted by lockdowns.”

“OnDeck is offering a solution by providing the unsecured funding needed to prepare for the end of year trading season, while giving businesses a 4-week breather on repayments. This is aimed at giving cashflow a chance to recover until Christmas trading kicks off – usually in October and November.”

“Unlike traditional banks and other online lenders who offer repayment ‘breaks’, this offer is a genuine repayment ‘holiday’. So, interest doesn’t accrue, and no repayments are required during the first four weeks. There is no cost to the business owner for availing of the repayment holiday.”

“The broker channel has been very quick to recognise the benefits of our repayment holiday – probably because many are small business owners themselves, and so empathise with the challenges many small businesses have faced in recent months.”

“Not surprisingly, we’re seeing plenty of take up of our repayment holiday option. The overwhelming feedback from brokers is that it means their small business customers have one less thing to worry about over the four weeks ahead.”

“The other plus, is that this is a rare time when a business can legitimately miss a month’s payment and it won’t impact the business credit score.”

“Each business is assessed on its own merits, however as a general rule a business needs to have been trading for a minimum of one year, with annual turnover of at least $100,000 to be eligible.”

“It’s also worth stressing that OnDeck does not ask for loan security on any size of loan. That’s very different from traditional bank lending and many online lenders, where property – often the business owner’s home – is almost always required as security for a commercial loan, and particularly on larger loans above $100,000.”

“We know from our own research that one in five small businesses are more likely to take out a loan if they have the option of a ‘repayment holiday’. So, this promotion really resonates with small business owners.”

“For brokers who are thinking of diversifying into commercial lending, OnDeck’s offer of a 4-week repayment holiday to all new and renewal loan customers during the month of September, can be the opportunity they have been waiting for to successfully market their services to local small businesses.”

Read more: Commercial brokers can get loans approved in just two hours