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Prospa reports 70% growth in new loans in FY18

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Tas Bindi 6 minute read

The small business lender originated $367 million in loans in the 2018 financial year, representing an increase of 70 per cent over the previous year.

In its annual financial results for FY18, Prospa reported that loan originations totalled $367 million in FY18, up by 70 per cent from the $216 million recorded in FY17.

The majority of the new loans, $211 million, were originated in the second half of the financial year, which itself was up by 61 per cent from $131 million in H2 FY17.

The annual growth has also reportedly exceeded forecasts by 9 per cent, thanks to “strong momentum in the fourth quarter”.


The fintech lender now claims to have lent more than $750 million to over 15,000 small businesses in Australia since its founding in 2012.

Meanwhile, loan originations in New Zealand reached NZ$1 million within the first month of launching into the neighbouring market, Prospa said.

After its 40-plus per cent annual percentage rate (APR) had been called into question, Prospa reported a 4 per cent decrease in the weighted average APR across its portfolio to 37 per cent in FY18, explaining that “lower funding costs have been passed on to customers”.

Prospa’s interest rates now range between 8.5 per cent and 29.9 per cent, the lender added.

Explaining the lender’s rates, Beau Bertoli, co-founder and joint CEO of Prospa, said: “Our objective is always to bring the cost of borrowing down. There are a number of factors that determine our rates – including the cost of capital, which, if you’re a non-bank lender, is much higher than the banks. Another factor is risk, and our rates are risk-adjusted to the borrower.


“Pricing appropriately for risk allows us to have a sustainable business so we can achieve our objective of supporting as many small businesses as we can.”

Prospa was among the long line of bank and non-bank lenders to be approached by the Australian Securities and Investments Commission (ASIC) to discuss the appropriateness of their loan contract terms.

ASIC had sent communications to a wide range of lenders in April and May as part of its efforts to ensure the industry is compliant with amendments to the Australian Consumer Law, which extended consumer protections to small business loan contracts of up to $1 million in November 2016. 

Earlier this month, the corporate regulator announced that, following its review on the lender which eventuated in Prospa delaying its listing on the Australian Securities Exchange, the lender had changed the loan terms in its standard form small business loan contract to “address terms being unfair under the unfair contract terms provisions of the ASIC Act”.

The fintech lender was also among the first six signatories to the Code of Lending Practice that aims to standardise transparency and disclosure around their online, unsecured business loans and the use of finance brokers.

Looking forward, Prospa said that it expects to continue on its strong growth trajectory in the 2019 financial year, adding that it sees an addressable market of more than $20 billion per year in Australia for SME lending.

Speaking of the founders’ journey thus far, Greg Moshal, co-founder and joint CEO of Prospa, said: “When Beau and I started this business six years ago, there was nowhere a small business could turn to if they had a great idea and needed funds to make it happen. The system was failing them, and we thought there had to be a better way.

“From that moment, we have always put the customer at the heart of everything we do. We designed an application process that was simple, taking the hassle out of finance. We engineered our processes to deliver fast, accurate decisions so our small business customers could get certainty and move on with doing business.”

The lender is currently trialling a line of credit product in Australia that is aimed at being a more flexible option for SMEs in need of short-term capital, though it remained tight-lipped on the details.

[Related: Ombudsman publishes SME guide to borrowing from fintechs]

Prospa reports 70% growth in new loans in FY18
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Tas Bindi

Tas Bindi

Tas Bindi is the features editor for The Adviser magazine. 

Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business. 

You can email Tas on: This email address is being protected from spambots. You need JavaScript enabled to view it.



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