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Banjo expands into broker space

by Annie Kane6 minute read

SME fintech Banjo is ramping up its offering to brokers with new products and new aggregator partnerships this year, as it eyes growth in the SME finance space.

The SME fintech, which was founded by former NAB banking executives in 2015 and is named after author Banjo Patterson, currently provides unsecured business loans of up to $500,000 to small and medium-sized enterprises (SMEs) in Australia.

According to the lender’s CEO, Guy Callaghan, the fintech is looking to entrench itself into the third-party space this year with new partnerships and new products.

Speaking to The Adviser, Mr Callaghan said: “In 2019, we put in place a lot of the building blocks for us to be able to push really hard on our growth in 2020. We’ve been building awareness and growing the business, and put on a number of business development [managers] for us to get ready for growth.

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“We’re now ready to start introducing new products, and we’ve got a really exciting product calendar for 2020.”

Mr Callaghan revealed that Banjo will be launching a new Flexi Working Capital Loan by the end of this month, a 16-month fixed-term rental product of between $20,000 to $500,000 with regular instalment payments of principal and interest that gives SMEs the option of switching to interest-only repayments for a window of time (max four months).

The CEO elaborated: “A lot of businesses that come to us have seasonal higher revenue times, higher expenses times, and they just need working capital where they’re under pressure. They might be experiencing a real stress on their business to make their repayment terms, but they know they’ve got an event happening in about a month or two thats going to bring in increased revenue for them.  

“So, the new working capital loan will give them a four-month window of their choosing, a seasonal window, where they can just pay the interest.” 

Mr Callaghan added: “It doesnt matter what the circumstances, theres always going to be businesses looking for finance and therell be different things that happen at different times that affect their cash flow. Weve had two national disasters that have highlighted that, the fires and coronavirus.”

The former Olympic swimmer turned finance CEO went on to outline that Banjo would also be looking to roll out a short-term interest-only bridging finance product, with a bullet payment, before the end of the year.

Focus on third-party channel

While more than 80 per cent of Banjo’s flow comes from third-party referrers such as brokers and accountants, Mr Callaghan told The Adviser that the fintech is particularly focusing its attention on the broker channel this year, partnering with several aggregators.

The Banjo CEO said: “Brokers have got a really good network and understanding of their SME clients’ businesses. Brokers understand their clients, they understand their needs and how theyre [faring], in a business sense, so they can be proactive around providing solutions for them.

“It’s important because SMEs just dont know where to turn. The options [for finance] are growing for them (and the unsecured space has grown exponentially in the last three years), but a lot of business owners still dont know where to turn, so theyll go to the traditional channels, and come up against pain. 

“The biggest problem that keeps them up at night is cash flow, but they dont want to secure the house, the cat, the dog, the mother-in-law against the loan. 

“So, the broker or accountant, a professional adviser, can help them source the funding they need.”

He continued: “Were really, really excited about the growth into the broker channel. Weve signed a contract with AFG, which is our first partnership with a large aggregator, and were also in a six-month pilot with Vow [Financial] at the moment, and in advanced discussions with others.”

“So, weve been putting in the building blocks over the last 12 months, and were really excited about our next phase and new products,” he said.

[Related: New business finance training program launches]

guy callaghanjpg

Annie Kane

Annie Kane

AUTHOR

Annie Kane is the editor of The Adviser and Mortgage Business.

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