Avenue Bank lands full banking license from Australian regulation authority

Avenue Bank, a digital business bank based in Sydney, Australia, has received an unrestricted banking license from the Australian Prudential Regulation Authority (APRA).

The APRA’s approval comes less than three years after it first awarded the bank a restricted banking license in 2021, authorizing it as a deposittaking institution. The approval was later extended in September last year.

Founded in 2018, Avenue Bank offers banking solutions for Australian businesses and specializes in providing bank guarantees for SMEs looking to secure commercial leases from landlords.

In this context, instead of the client paying a bond to the landlord, equivalent to nine to 12 months of rent, they instead present a bank guarantee, ensuring that should the deal fall through, the guarantee will cover the financial losses.

However, it’s not uncommon for paper-based guarantees to endure a four to six-week process, often to the detriment of time-constrained businesses.

Avenue Bank claims to have digitized this process, saying its applications take only around five minutes with final decisions issued within 24 hours.

Australian Financial Review reports that with its new unrestricted banking license, the bank plans to expand its suite of cashflow solutions, including adding a drawdown option to enable clients to access working capital through their deposits, as well as additional tools allowing landlords to better manage claims made against guarantees. Avenue Bank also plans to fuel other areas of its expansion following its Series D round this year, which secured the firm an additional $17.7 million.