While sharing its FY20 results yesterday, 27 August, an online small business lender tempered some of the more subdued figures recorded over the 12-month period with further optimism about the “green shoots” it is already seeing across Australia’s small business landscape.
Prospa managed to chart strong growth in certain areas of the business despite the challenging conditions, increasing the number of total unique customers in Australia and New Zealand by 43.5% from 2019. Further, the group’s average gross loans of $433.3m at the close of June 2020 was up 35.7% on the prior year.
However, FY20 loan originations of $450.9m were down considerably from the $501.7m evidenced in FY19, with the total revenue from the year just concluded up 4.2% from 2019.
Prospa chief revenue officer Beau Bertoli used the results as an opportunity to spotlight the continued needs of Australian small businesses moving forward.
“At this critical time, it’s more important than ever that small businesses are aware of alternative funding solutions to support cash flow or invest in their future,” Bertoli said.
“Our strong network of partners helps us reach more customers across the country and improve their access to capital. We have our finger on pulse of the small business economy and are well positioned to support the green shoots of the small business recovery.”
As early as June, Prospa began to report seeing signs of recovery across small businesses.
While total originations for FY20 were “materially impacted” in the fourth quarter due to COVID-19 related pressure, the lender saw a gradual increase in originations over the period and into July 2020.
Further, a significant portion of customers have already opted to resume full or partial repayments. As of 20 August 2020, just 1,769 customers in Australia remain on full or partial deferral arrangements as compared to 4,701 at the peak.
However, Australian Bureau of Statistics (ABS) data also released yesterday revealed that more than a third (35%) of Australian businesses still expect to find it difficult to meet their financial commitments over the next three months, with small businesses almost twice as likely to report they expect difficulty as compared to large businesses, making it clear many remain in need of help.