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Banking on SMEs

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The Adviser 5 minute read

In April, Judo Capital was granted a full Australian banking licence, making Judo Bank the first authorised deposit-taking institution dedicated to small and medium-sized businesses in Australia. George Obeid, Judo Bank’s managing director, third party, outlines how the bank will be helping broker clients.


Why did Judo become a bank and what does it enable Judo to do that it couldn’t previously?

In building Judo, we began with the end in mind, to become a fully licensed bank. The case for premium SME-focused banking services and greater access to funding (there’s an $83 billion funding gap) is not only evident, but critical. The progressively dehumanised and industrialised banking market meant that SMEs were calling out for a bank like Judo to provide the traditional values of good old-fashioned­ banking.

Judo Bank is purpose built to become Australia’s most trusted SME business bank for brokers and customers. Saying yes to more businesses, bringing the human face back to business banking and behaving differently to bigger banks that have gone before us is at the heart of Judo’s ­philosophy.

We operate quickly, nimbly and face-to-face, which means brought to you by we can help Aussie business owners capitalise on the right opportunities quickly – opportunities that they might otherwise have missed.

Becoming a fully licensed bank enhances our ability to grow all aspects of the business and compete on a level playing field with the incumbents.

We can take deposits as well as offer loans; both of which ultimately support the needs, goals and aspirations of Aussie­ businesses.

What does Judo Bank stand for?

We believe Aussie businesses don’t have it easy. Any successes are born from lots of hard work, a little bit of luck and the right financial support – support that’s been increasingly hard to come by.

The support of a highly skilled banker that understands and appreciates the needs of the business, providing tailored solutions, is invaluable but increasingly hard to find for SMEs. These banking capabilities don’t lend themselves to automation or digitisation and as the industry has industrialised its operating model and dehumanised the service proposition, the SME community has been left behind. It is for this reason we built a relationship bank specialising in SME lending.

Judo’s raison d’etre is to make it easier for SMEs to access the funding they need and the service they deserve. We work in true partnership with our brokers that deal directly with the decision-maker who is empowered to assess each application on its merits, including the quality of the business and the people running­ it.

Judo’s lending philosophy is underpinned by the principles of the Four C’s of lending:

  1. Character: the capability and experience of the people running the business;
  2. Cash flow: a deep understanding of customers’ businesses and the impacts of the transaction being undertaken;
  3. Capital: the degree of capital contribution required is dependent upon the aspects unique to the customer and the transaction, as well as the outcomes of the character and cash flow assessment; and
  4. Collateral: considered secondary and only when necessary to support undercapitalised transactions. Collateral also recognises the value inherent in balance sheet assets. Importantly, character, cash flow and capital assessments are critical in determining the requirement for collateral support.

In dealing with Judo, our brokers and customers will experience face-to-face service and fast, judgment-based decisions that are free from bureaucracy, complexity, legacy systems and processes – making us easy to do business with.

What is Judo Bank’s broker strategy?

Judo is a business designed to get behind its brokers and their success. Built from the ground up, Judo has developed a unique ‘broker partner’ proposition that delivers a transparent end-to-end solution that keeps the lender, broker and customer informed every step of the way.

We’re committed to open relationships between ourselves and our brokers, relationships built on trust and a mutual respect for the customer. Brokers are out there in the field, often the first point of contact for businesses seeking finance.

Judo offers its commercial and asset finance broker partners access to the decision maker, greater efficiency, competitive commission and pricing, faster response times, and legacy-free technology, so they can get back to what matters most: running their business.

Additionally, our proposition also ensures the customer relationship stays with the broker, while providing complete visibility of the end-to-end process via our CRM system. Our commercial and asset finance brokers also have access to a dedicated business minded banker and broker BDM to ensure common sense credit decisions are made promptly – within five working days, providing all relevant information is supplied.

What would you describe as a ‘Judo Bank loan’?

As Australia’s first dedicated business bank, we want to be champions for small and medium-sized businesses – the most dynamic sector of the Australian economy but too often ignored and neglected by the incumbent banks.

We do not take a cookie-cutter approach to lending. Every business’ needs are unique and should be treated that way; there are challenger businesses looking to grow; established players looking to modernise; and others that simply require working capital lines. Asset backed or non-asset backed, we judge every business on its individual merits.

Judo Bank relationship bankers prioritise time with each and every one of our customers to build an unrivalled understanding of every aspect of their business and find solutions that are genuinely right for them, in a time frame that meets their needs.

As stated above, a Judo loan involves a deep understanding of the business, working closely with our broker partners to make common sense decisions that deliver for our customers.

Typically, we offer loans from $250,000 upwards servicing the SME market, which is generally defined as businesses with a turnover of up to $50 million and lending requirements up to $10 million.

We look at established businesses with a good track record and experienced operators. Our capabilities include term debt, working capital, succession planning, property finance, vehicle and equipment finance, business acquisition/expansion and debt structuring. We are continuously expanding our capability to ensure our brokers/customers have access to exactly what’s right for them.

What do you hope to achieve in your first 12 months of your ADI licence?

The banking industry is experiencing an exciting period of disruption and transformation. SMEs have been crying out for greater choice and greater competition for a long time. Over the next 12 months, we see Judo Bank leading the way in alternative finance options; offering greater efficiency, cutting-edge technology, competitive pricing, faster response times and more bespoke product offerings.

However, it’s the relationship side of our offering that we see as most important contribution Judo Bank can make to brokers and SMEs.

We believe it’s this true ‘relationship banking’ that will be our greatest differentiator and greatest asset as we look to service the funding needs of thousands of Aussie businesses and grow Judo Bank nationally, doubling the number staff over the next 12 months.

Together with our brokers, we’re pledging to bring back the human face of business banking to deliver banking as it used to be, banking as it should be.

Banking on SMEs
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