Crowded SME Loan Market Welcomes New Player
(19 April 2021 – Australia) Buy-now-pay-later (BNPL) outfit Zip Co has launched into the SME lending fray with a new offering enabling SMEs to settle over the counter business expenses in instalments.
“Zip Business Trade Plus” will now offer two month interest free credit facilities between A$3,000 and A$150,000, adding to its initial commercial solution allowing small businesses to apply BNPL for checkout payments of A$3,000. The product is designed to give small businesses quicker and easier access to capital without having to deal with traditional bank channels. The service promises approvals in under one business day however the company advises most applications will typically be turned around in under 30 minutes.
Payments are interest-free for 60 days, or the business can pay in four equal monthly instalments for a three percent fee. Late payments incur a A$25 flat fee, and any customer with an account in arrears will be prevented from accessing further credit.
“Cashflow is the number one pain point for small businesses. But it’s also the ability to get that cash flow when you need it, and to be able to simply reconcile and track it in one place” stated Zip Business General Manager, Geof Alexander.
“Small businesses generally don’t have the time to consider what capital they might need in a few months’ time and start an application process in advance. They tend to have more of a consumer mindset. When they need a product, they need it right away. The idea is not to make big revenues from late fees. Zip wants customers to continue to engage, and to use the product again” Mr Alexander added.
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