Fintech Moneytech has been accepted onto the government’s SME Recovery Loan Scheme lender panel for the third phase of rollout.
Moneytech will be one of the few fintechs on the panel, and their CEO Nick McGrath said that it was vital that the sector was represented.
Under the terms of the SME Recovery Loan Scheme, any small business that was receiving the JobKeeper subsidy or was affected by the early 2021 floods will be able to access finance, with the government backing loans up to $5m and for as long as 10 years.
Moneytech participated in early incarnations of the SME Recovery Loan Scheme, sometimes known as SMEG, and claims to have helped to settle more than 150 facilities during the first two phases.
Many had called for greater fintech involvement in the recovery after brokers cited unwillingness on the behalf of the bigger banks to lend to distressed businesses.
“Speed to market and loan application simplicity is critical to SMEs,” he said. “Which is made easy through fintech lenders such as Moneytech who have developed automated online application and decisioning tools. In addition to the automation advantage, fintechs are able to be agile and nimble with new product and technology initiatives.”
Involving fintech sector in the SME Recovery Scheme is seen as vital to offering choice to small businesses, and could lead to lasting changes within the SME lending sector as a result of more businesses interacting with fintechs.
“Having Fintechs as part of the government SME lending panel creates more tailored product options for Covid and flood impacted customers,” said McGrath. “It also forces traditional lenders to innovate products the way that a fintech does.”
“Ultimately this is great for SMEs as it pushes the lending industry forward from a technology perspective. The government guarantee provided to the fintech lenders also assists the lender in growing their loan portfolio, which creates a larger fintech ecosystem and more competition for the banks.”