GetCapital, a local fintech lender to SMEs, has entered into a strategic partnership that enables it to service the New Zealand market.
Jamie Osborn, GetCapital’s founder and CEO, said the expansion into New Zealand was the ‘next logical step’ for the company given its success in Australia.
“With the large number of SMEs in New Zealand facing the same challenges as the Australian market, we are excited to offer our working capital finance solutions to fill the void left by traditional banking,” he said.
“We are very pleased to have launched our offering with a like-minded partner in Avanti Finance, a leading independent non-bank finance company in NZ.
“The partnership with Avanti Finance involves the licensing of GetCapital’s technology and credit underwriting via a Lending as a Service (LaaS) model.
“Our working capital finance solutions are now available in NZ via select finance brokers as well as directly via getcapital.co.nz. SME borrowers also have access to a broad range of finance solutions beyond working capital through Avanti’s existing product suite.”
‘We’ve been pleasantly surprised’
Osborn told Dynamic Business there were ‘two clear triggers’ for GetCapital entering the New Zealand market. The first, he explained, was keen interest from the company’s partners to expand geographically.
“We are really pleased that over the past four years we have been able to build a world class group of strategic partners including Alibaba, OFX, Xero and recently BPS Technology (the owner of Bartercard),” Osborn said.
“These partners are all international players and they have encouraged us to expand into other markets to support their regional operations.”
“The second trigger came off the back of work that we did with Avanti Finance on the SME market in NZ. It showed that NZ SMEs are facing the same constraints to growth as Australian SMEs with limited funding options. We have been piloting the GetCapital offering for the past 6 weeks and have been pleasantly surprised by the demand for our product.”
‘A compelling alternative to banks’
Osborn said traditional banks underservice SMEs seeking to finance working capital and growth capital
“The only product banks offer for working capital is business overdrafts and these almost always require property security these days – so they’re really property loans dressed up as a working capital facilities,” he said.
“What’s worse is that even if the SME owner has property security to offer, the underwriting process typically takes weeks if not longer and the loan amount is limited to the excess equity the owner has in their property. It’s just not a good solution for the average SME.”
Osborn said the alternative lending market offers two compelling opportunities for SMEs.
“The first is access to working capital and growth finance based primarily on the cash flows of the business,” he explained.
“This means, if you have a strong business there’s a very good chance you will get access to funds to grow without the need for property security.
“The second is that with some of the more sophisticated fintech lenders, the SME can get access to funds through a very fast and simple process. GetCapital, for example, has a 100% online process and we can typically fund a client within 24 hours. We have had clients identify an opportunity to buy discounted stock on a Tuesday and apply and get funded the same day.
“We are also proud of the fact that 65% of the customers that take out a loan with GetCapital experience an increase in revenue as a direct result of the funds they receive from us – it’s a great proof point that we are helping Australian SMEs grow.”