Online lender Prospa is celebrating its end of year results which show a 70% growth in loan originations.
The company reached $367million originations which were up 9% on prospectus forecasts. It has now delivered $750m in total loans to more than 15,000 small businesses across Australia.
Total loan originations for the six months ended 30 June 2018 totalled $211m, up 16% on prospectus forecasts and up 61% on the previous corresponding period.
Greg Moshal, co-founder and joint CEO of Prospa, said, “Our continued growth demonstrates Prospa is going from strength to strength by supporting access to finance for an underserved market.
“Our growth is driven by small businesses’ need for quick and easy access to finance so they can manage cash flow and seize opportunities to grow.”
Beau Bertoli, co-founder and joint CEO of Prospa, said, “I am incredibly proud of what we have achieved in the past six years. We had a great year in our core product, the small business loan, which delivered 70% growth year on year. And I am really excited about our expansion into New Zealand and our line of credit product.”
During FY18, Prospa achieved a 400bps decrease in weighted average APR for the portfolio to 37%. It said lower funding costs were being passed on to customers. Prospa’s interest rates range between 8.5% and 29.9%.
Bertoli said, “Prospa is committed to improving access to finance for small businesses. Our objective is always to bring the cost of borrowing down.
“There are a number of factors that determine our rates, including the cost of capital, which, if you’re a non-bank lender is much higher than the banks.
“Another factor is risk, and our rates are risk adjusted to the borrower. Pricing appropriately for risk allows us to have a sustainable business so we can achieve our objective of supporting as many small businesses as we can.”
Moshal added, “When Beau and I started this business six years ago there was nowhere a small business could turn to if they had a great idea, and needed funds to make it happen. The system was failing them, and we thought there had to be a better way.
“From that moment we have always put the customer at the heart of everything we do. We designed an application process that was simple, taking the hassle out of finance. We engineered our processes to deliver fast, accurate decisions, so our small business customers could get certainty and move on with doing business.
“We then built lasting relationships with those customers, investing the time to understand them and help them to take advantage of the next opportunity when it comes along.”
Prospa has recently expanded to New Zealand, where it originated $1m in loans within the first 30 days.