Ex-Big 4 executives launch business lending platform
(14 June 2016 – Australia) Four former executives from Australia’s largest banks have come together to launch a new fintech lender.
The new venture aims to bridge the "working capital gap" faced by small businesses by matching them with market-place investors, via an online platform.
Bigstone, which launches today, is being headed by chief executive Boyd Pederson. Pederson’s background includes senior positions such as managing director at Boston Consulting Group and director of business banking transformation at Westpac Banking Group.
“Having worked in senior finance roles, we saw first-hand how hard it is for small business to get funding. Owners can spend months waiting for a response only to be told that they can only get a loan with increased fees, more paperwork and more collateral. The current system doesn’t work, and after years of listening to small business concerns, we chose to create a solution,” said Pederson.
On Bigstone’s platform, businesses will pay between 8 and 24 percent per annum depending on risk and the quality of security (which is provided over the business itself and directors' guarantees), while investors will receive 7 to 23 percent per annum before loan losses. Bigstone earns the 100 basis points spread from investors, while borrowers pay a market access fee when they get funded.
The venture’s management team will be comprised of Westpac’s former head IT architect, Robert Morgan as chief technology officer, ANZ Bank’s former head of divisional risk, Marcus Korff who will be the firm’s chief risk and analytics officer and Inderjit Singh, the chief operating officer, who also had worked at Westpac.
According to a statement from Bigstone, the firm can price loans in three minutes and approve them within 24 hours.
“We want to return lending to its roots by creating a community where investors come together to fund the best opportunities while also earning a great return. There is so much information available that banks simply aren’t using – Bigstone uses this data to create an honest credit assessment. We then reward borrowers for transparency; so the more information you share, the better your rate will be,” Pederson added.
The launch follows a recent announcement from NAB, who launched an online lending platform for small businesses, moving away from its competitors who have opted to partner with established fintech lenders.
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