SMART Box™ is a new tool to help small business owners understand the most important pricing metrics of their business loan.
The comparison tool is set to make it faster and easier for brokers to explain what their clients are signing up for.
It has been introduced as part of the Australian Finance Industry Association (AFIA) Online Small Business Code of Lending Practice.
The code was signed by seven of the largest online business lenders last year and outlines best practice principles to improve transparency and standardise business loan pricing disclosure.
SMART Box™ is a one-page document that displays four key loan details as well as seven pricing metrics so brokers and business owners can understand and objectively compare the total cost of a business loan.
Moula is a founding member of the AFIA Code of Lending Practice and has helped define and establish the code from its inception.
Moula’s head of sales, Tas Tzimos, said the tool will help establish a consistent standard of pricing disclosure amongst fintech lenders so business owners can compare loans on metrics such as the total cost of credit, average monthly repayments, interest rates, and any origination or early repayment fees and charges.
Tzimos said, “Small business owners need to understand exactly what the total cost of credit is for the business loan they’re taking out.
“Some business owners don’t necessarily understand how some fintech products work. At Moula, we’re dedicated to making sure that when they are signing a contract for a particular product, they know exactly what they’re signing up for and what the total cost of credit is going to be for the business.”
Tzimos said brokers will be able to use SMART Box™ to better service their clients.
He said, “It’s only going to make it easier for them to pick the right lender based on the client’s objectives. SMART Box™ will help them explain exactly what product they’re being offered by the lender and what it’s going to cost them to proceed with it.”
Looking at the SME lending landscape and how fintechs are making a difference, Tzimos added, “We think it’s a great start in making business lending more transparent and helping brokers and small business owners clearly understand how these new fintech products work.
“The need for alternative lending has become more evident in the wake of the Royal Commission.
“While the big four have tightened their credit and introduced more in restrictive requirements, fintechs have improved the business lending process dramatically. Our products allow clients to experience a faster decision by using real-time electronic submission and execution of business loan applications and contracts.
“As business owners turn to brokers for help and guidance in securing business funding, we’re dedicated to delivering more transparency, quicker turnaround times, and a better, easier experience for business owners. And SMART Box™ is the latest step along that path.”