A non-bank lender has announced the upcoming addition of a new loan product for small businesses, currently in its pilot stage.
The offering from Liberty Financial, entitled Liberty Lift, ranges from $25,000 to $1m for businesses with strong credit profiles that have been in operation for three years or more.
Loan terms up to five years are secured by business cash flow rather than a mortgage security.
Recent research has revealed that being required to provide property as security for new loans was cited as a major frustration by 80% of businesses surveyed, with two-thirds going so far as to say they would “definitely” be prepared to pay more in interest to avoid using their personal property as collateral.
Further, data from the Reserve Bank of Australia (RBA) has shown total new credit approvals to business for $2m and under has reduced by 13.6% from June 2018 to June 2019. Concurrently, the percentage of SMEs reporting cash flow issues has doubled since March 2018, with 19.6% saying it is worse or significantly worse.
Liberty’s new product intends to address these concerns, filling the funding gap in the market for small businesses that are already well established, but still developing.
“For the application, we will need the businesses’ financial statements and completion of a streamlined application form. We won’t require a mortgage for security against the loan, so the whole process is hassle-free and supported by Liberty’s leading service levels,” said group sales manager, John Mohnacheff.
“We’ve established a dedicated business lending department to support our brokers and business partners. We’re committed to helping more businesses to get financial with Liberty and this continues our unmatched record of innovation which will again lay a path for others to follow.”