OnDeck have launched a new product that could see SME customers have their loans approved within two hours. Lightning Loans has already been trialled and will now roll out to commercial brokers.
The product will be capped at a maximum of $100,000 and will require just six months’ worth of bank statements as proof. It is aimed at taking the weight off brokers by clearing up the two thirds of SME loans that are approved with ease, allowing them to focus on more complex deals, as well as by drastically reducing turnaround times.
OnDeck recently announced their new KOALA score – Key Online Australian Lending Algorithm – to help them assist in decision making. It is a risk management model that uses data and analytics to assess borrowers and give them a steer regarding who they should lend to.
“That enables us to make a more predictive decision on the ability of a business to borrow money and how much we should lend them,” said CEO Cameron Poolman. “We’re able to access more data and get a more predictive score.”
“What Lightning Loans is about is utilising that score, but building a process around it that allows us to come back with decisions for small businesses within 90 minutes. 65% of businesses that are requesting loans less than $100,000 are able to do the Lightning Loans process and get very quick decisions.”
“What’s great for brokers and for customers is that they’re able to get that decision really quickly and then decide themselves whether its something for them. They can decide whether they want to do the project in their business: whether they want to do a marketing plan, hire new staff or buy some plant equipment and use the asset write off.”
“It’s a very quick decision regarding how much they can borrow and have that availability. I think it’s in stark contrast to what the brokers are seeing from the other funders on the mortgage side of the business. We’ve invested a lot in our business to increase the speed and access to SME, and Lightning Loans about being able to come back with that quick response.”
“We’ve had a great response from our brokers so far, they’re absolutely loving that they can get that sort of speed, and the only data that we need is 6 months bank statements. This for that 65% of customers – we want to get it up to 80% but we’re on a good trajectory.”