Alternative lending to become mainstream
Australia’s alternative lending sector is set to go mainstream as early as 2020, according to the US’s leading online small business lender OnDeck, Inc.
OnDeck CEO Noah Breslow said Australia’s rapidly evolving alternative finance market, had the potential to outpace the US market in its shift towards mainstream. According to Breslow, Australian market drivers fuelling the speed of this shift include the heightened challenge SMEs face in accessing funding through traditional sources, faster technology adoption, greater relative investment and the more concentrated nature of the market.
Research on the sector shows new approaches to lending could tap into unmet demand for Australian SME finance worth up to AUD $70 billion. Research also estimates the total addressable market for new SME lenders is likely to grow to AUD $95 billion by 2020.
“The small business credit problem is global in nature. Small businesses need working capital to buy inventory, or expand, or hire more staff, yet traditional lenders are not equipped to meet their financing needs,” Mr Breslow said.