Lenders have continued to be named as participants in the Coronavirus SME Guarantee Scheme following its official commencement at the end of last week.
The scheme allows lenders to provide SMEs new unsecured loans of up to $250,000 which have a 50% guarantee from the government, enabling them to be offered more cheaply and more freely as compared to ordinary business loans.
While two non-banks yesterday announced they have joined the ranks of those offering the unsecured funding, neither lender was able to confirm their stance on broker commissions for the new loans.
To this point, some scheme participants, such as NAB, have said there will be no broker commissions paid on loans written under the scheme while others, such as Liberty, will pay an upfront commission of 0.45% of the approved amount but no trail.
Online small business lender Prospa has received access to the scheme to help small businesses deal with the impact of COVID-19 over the next six months.
Prospa has received an allocation of up to $223m under the scheme, which can be applied to all eligible new lines of credit and loans issued between 14 April and 30 September 2020.
“It’s fantastic to see the government understands what small businesses need right now to survive,” said Prospa CEO Greg Moshal.
Prospa chief revenue officer Beau Bertoli highlighted the importance of the third-party channel in distributing the funds.
“The broker community will be crucial in helping us reach and support as many small businesses as possible,” he said.
“I encourage brokers to contact the Prospa team with their scenarios to see if we can help. We’re accepting expressions of interest from today, so reach out.”
According to Bertoli, there will be a partner remuneration program launched with the product in the coming days.
“We know that many brokers are small business owners too and recognise this is a tough period for most. We’re committed to supporting our partners and their customers in any way we can,” he said.
Fintech Moula has also been selected as one of the five non-bank lenders to participate in the scheme, with its proprietary technology enabling the group to approve loans within hours.
“Speed of decisioning is critical in how Moula can serve SMEs in this rapidly-changing climate,” said Moula CEO Aris Allegos.
The lender has indicated it will not be able to confirm the commission structure for brokers until funds become available.
In its first round of approvals, the government has indicated it plans to make offers of participation to 29 banks and 5 non-bank lenders.