An SME lender is celebrating research which shows it has contributed $3.65billion to the Australian economy and helped to maintain 52,500 full time equivalent (FTE) jobs.
Prospa conducted research into the full economic impact of its lending to small businesses.
The project considered the value of funds lent by Prospa over the period 2013 – 2018, assessing how funds have benefitted customers through increases in revenue and employment and the flow-on effects of these funds to the wider economy.
It showed that for every $1m in lending there was a corresponding $4m increase in GDP.
Twenty-six percent of customers asked in the project said they were unsure as to whether they would still be operating without their most recent loan.
More than 80% of customers said they believed their most recent Prospa loan resulted in an increase in business revenue.
Greg Moshal, co-founder and joint CEO of Prospa, said, “This report reinforces how important it is for small businesses to be able to access funding, the significant role of Prospa in providing that funding, and the flow on impact on the wider Australian economy.
“We have always celebrated every individual customer as a success story. As the leader in online small business lending in Australia we wanted to quantify our overall impact.
“The results are greater than we had ever imagined and give us an immense sense of pride, both in Prospa and in our partner network who share our vision and values.”
Moshal said that brokers were having an impact by enabling them to support small businesses.
“Brokers are an invaluable part of Prospa and enable us to support as many small businesses as we can,” he added.
“In providing their small business clients with fast, simple access to finance, they are directly contributing not just to their customers’ revenue and jobs, but to the wider Australian economy.”
Fellow co-founder and joint CEO, Beau Bertoli, added, “This research tells us three things. Our lending is in demand, it’s helping small businesses grow and employ many thousands of Australians and it will have an even bigger impact as Australians increasingly become aware of alternative lenders.
“Our lending makes a difference and underscores the importance of the Federal Government’s decision to make available $2 billion in loans for small businesses.
“These funds are critical to support the engine room of the Australian economy at a time when large banks are tightening their credit policies.”
Prospa’s contribution to has increased year-on-year as originations continue to grow. The value of Prospa’s GDP contribution in 2018 was $1.69b, 49% greater than its contribution in 2017, which in turn was more than double its contribution in 2016.
The industry sectors where Prospa’s lending made the biggest impact in 2018 were hospitality, building and trade, manufacturing, retail, professional and other services.
The survey found Prospa customers used an average of 32% of their most recent loan for working capital, 24% for purchasing inventory/stock and 12% to purchase additional hardware such as machinery and tools.