Powered by MOMENTUM MEDIA
the adviser logo
Tech

Prospa boosted by business sentiment rise

by Sarah Simpkins6 minute read
Prospa boosted by business sentiment rise

Prospa managed a personal best of $182.7 million in loan originations during the June quarter, with the business lender reporting a rebound in SME confidence.

The company reached its own record level of originations during the last quarter of the 2021 financial year, noting a 51 per cent rise from the prior three months and a surge almost eight times higher year-on-year (although the same period in 2020 had been affected by COVID-19).

To continue reading the rest of this article, create a free account
Already have an account? Sign in

Prospa had also recorded its highest monthly originations, with $79.8 million lodged in June, increasing from $61.4 million in May and $41.5 million in April.

Of the total originations for the quarter, 74 per cent were from Prospa’s small-business loan and 26 per cent were from the company’s Line of Credit product.

Advertisement
Advertisement

Prospa credited its improved technology and streamlined approval process for ramping up its originations, stating the changes had allowed it to assist more customers with a similar team size.

Greg Moshal, chief executive of Prospa, commented that the lender is benefitting from the rapid recovery of the Australian, Kiwi and global economies.

The key drivers for the lender’s results have been recovering SME business confidence, he added, and the CEO is confident that Prospa is in the “best shape” to support businesses through COVID restrictions.

“While we are all too aware of the challenges currently faced by small businesses in the Greater Sydney metropolitan region, Victoria and South Australia, the SME sector generally has been on a solid recovery path this past financial year,” Mr Moshal said.

“Research undertaken on our behalf by RFi Consulting in May 2021 shows that one in four SME business owners expect their FY21 turnover to increase. This compares with just 7 per cent who expect it to decrease for the period.”

The research had also revealed that access to credit remains a “fundamental problem” for SMEs, he added.

“Over the past 12 months, SMEs were declined $23.9 billion in credit. The rebound now being witnessed among SMEs has seen the appetite to invest in their future increase further,” Mr Moshal said.

Prospa chief revenue officer Beau Bertoli added the upward trajectory of Prospa’s business has been possible due to “brokers who have shown confidence” in the lender’s products.

The lender closed the quarter with $427.1 million in gross loans and 11,900 active customers.

Around half of Prospa’s total originations ($91.6 million) were returning customers.

Total revenue before transaction costs for the quarter was $33.4 million, up 17 per cent on the previous quarter and 14.9 per cent on the previous corresponding period.

The New Zealand business, meanwhile, saw $34.3 million in originations during the fourth quarter, a 72 per cent elevation from the quarter before.

The New Zealand Business Finance Guarantee Scheme had accounted for 46 per cent ($15.7 million) of the originations.

Prospa has a long-term plan to connect its capital solutions with an integrated suite of cash flow management products – enabling it to play a greater role in day-to-day payments and transactions within its customers’ businesses.

Mr Moshal noted the fourth quarter results has shown that the business is on a “solid growth trajectory”.

“Importantly, total revenue growth is robust across our two products in Australian and New Zealand, and it has been achieved without materially changing our risk settings,” he said.

“Our robust balance sheet and funding platform enables us to pursue a range of strategic growth options, including further product development and enhancing Prospa’s tech capability.”

[Related: Fintech calls for SME Recovery Loan Scheme extension]

Prospa boosted by business sentiment rise
uptick graph
TheAdviser logo
uptick graph

Sarah Simpkins

Sarah Simpkins

AUTHOR

Sarah Simpkins is the news editor across Mortgage Business and The Adviser.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

sam jolley elders ta iwsfut

Elders welcomes 1st national growth and asset finance manager

Elders Home and Commercial Finance, the independent broking arm aligned with the real estate network of Elders Ltd,...

READ MORE
rael ross butn ta rerexr

Butn achieves record originations in July

Cash flow financier Butn has released a trading update, revealing that its 2023 financial year commenced with a new...

READ MORE
daniel tuttlebee resimac asset fInance ta l27zun

Resimac takes controlling stake in Sonder

Resimac Asset Finance has expanded its acquisition stake in equipment finance business Sonder Equipment Finance...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more