Moneytech, which offers trade and debtor finance services and equipment finance to SMEs, has recently expanded its lending empire into business loans for commercial property – a product the non-bank is expecting to turn heads in a big way.
“The purpose of the business loan could be twofold: one to acquire commercial property; the second could be to raise funds against an existing property that you own in order to facilitate a cash injection into your business,” CEO Nick McGrath says.
The application process for the new product is entirely digital, integrating numerous automated background checks. These checks assess not only the borrower’s credentials but also property details, including zoning, postcode, and usage. A personalised price is then generated, accompanied by an indication of loan approval or declination.
“Within a few minutes, [the customer] will be able to get a very clear understanding of whether Moneytech has an appetite to do that loan or not, so they’re not wasting a ton of time for themselves as the broker or for the borrower,” McGrath says.
But perhaps, the offering’s standout attribute lies in the assessment’s accuracy, reflecting the advanced technology driving the entire process.
“When they get an indicative approval, it’s still subject to some items,” McGrath says. “But 90% of deals that are approved would proceed to settlement if the borrower accepts the offer.”
Once a potential borrower commits to a specific deposit, such as 30%, they cannot subsequently lower it to 20%. However, the key point is that an indicative offer from Moneytech demonstrates the viability of the deal in practical terms.
“[We] can be pretty sure that it’s a good approval, whereas a lot of other lenders will give an indicative offer that hasn’t done a lot of the credit checks,” McGrath says.
Given the low possibility of a deal falling through unexpectedly, some brokers may use the Moneytech portal primarily as a reliable gauge of current lender appetites for commercial property. McGrath, however, isn’t concerned.
“Even if they use it as a bit of a tyre-kicking tool, it’s still of benefit to us because we can see that they’re in there fishing around…” he said. “[If something looks solid, we can] give them a call and see if there’s a deal there.”
McGrath believes the new low-doc assessment product, catering to loans up to $2 million, will gain popularity due to increasingly stringent lending conditions at mainstream banks, driving business towards non-banks.
Another distinctive advantage, possibly unique to Moneytech, is its existing range of services, encompassing trade, debtor, and equipment finance. Brokers and customers already using these services will recognize the efficiencies of consolidating their commercial property needs with the non-bank.
“Most non-bank lenders do one product only,” McGrath said. “But the average SME requires at least four products: trade finance to fund inventory, debtor finance to fund their invoices, property finance to buy property, and equipment finance to buy vehicles and yellow goods and trucks and trailers.
“When an SME requires different kinds of financing, it’s common for them to apply to a range of lenders – one finance type per lender. There’s a big burden on time and administration to do that. Moneytech provides all four products, and that’s really what makes us different from other non-bank lenders.”
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