Following broker feedback, the small business lender has developed a new line of credit facility for SMEs.
The launch of the new Prospa Line of Credit, a revolving facility of between $2,000 and $25,000, comes following broker demand for greater product diversity, the lender said.
The new business line of credit product offers Australian business that have been trading for six months a facility of up to $25,000, which can be redrawn “as many times as needed” over the 12-month term.
Interest is charged on a weekly basis at a fixed rate, calculated daily after the funds have been first drawn down.
While interest is based on Prospa’s assessment of the business, the annual percentage rates start from 14.95 per cent per annum.
The product also comes with an activation fee of $195 and a monthly subscription fee of $25, which is charged monthly in arrears from when the funds are first drawn down.
Speaking of the new product, Matt Bauld, Prospa’s general manager of sales and business development, said: “Brokers are very important to our business, and their feedback and opinion is crucial to our success. At Prospa, we are always seeking to provide a better experience to our customers and partners and so we have listened to their feedback and acted on it.
“Our partners wanted more choice – specifically a revolving credit facility for small business. The Prospa Line of Credit will allow customers to manage their day-to-day cash flow needs by providing access to a convenient and flexible source of funds.”
As well as announcing the new line of credit, the SME lender has also updated its business loan products to include new rates, increased loan amounts, longer terms and a faster application processing time.
The Prospa Small Business Loan Express product will therefore now come with reduced documentation requirements for loans up to $150,000, while the Prospa Small Business Loan Plus will now come with a maximum loan size of $300,000.
The lender added that it can also now offer “improved pricing” with simple annual interest rates from 9.9 per cent to 26.5 per cent and a 48-hour turnaround.
The moves follows on from Prospa’s adoption of a “product matrix”, which clarifies the requirements and criteria that inform its pricing and credit policy.
The matrix, which helps partners recommend the most suitable products to their customers with confidence, has been adopted by the seven signatories of the Australian Finance Industry Association’s Code of Lending Practice for online small business lenders.
Mr Bauld stated: “Our partners wanted more information and flexibility in relation to document requirements, rates and term.
“The changes made to our core product, with better rates along with greater transparency on our credit and pricing policies, will make our business loans even more appealing to a greater range of brokers and customers.”
[Related: New pricing tool for SME loans launched]