Westpac, based in Australia, is in the midst of piloting a new partnership with Prospa, the small business lender, The Sydney Morning Herald reported Friday (Nov. 20).
Through the partnership, the initial foray centers on referrals that wend their way from a Westpac-hosted site and are sent to the Prospa loan application Web platform. Should the partnership expand into something fuller and official, Westpac will be more likely to get a referral fee for each customer that offers up information, ranging from names to contact details, and applies for a loan from Prospa.
As SMH reported, the product portfolio director for Westpac’s SME business lending operations, Tonia Berglund, has been talking to “all the new online SME lenders that have emerged this year,” a roster that includes OnDeck, which is, of course, based in the United States. And, has been noted, OnDeck is likely to begin lending in Australia in the near term. The executive told SMH that Prospa had been in the local market relatively longer than peers and has a solid database of information in place. In addition, she noted that the initial partnership had yet to be formally announced because it remains in the trial stage.
For its part, Prospa had been looking for a bank partner, with an intent to gain access to distribution channels and a backer in order to fund loans. Prospa has loaned roughly $80 million in the past few years and has said that it now reviews about $30 million in applications per month, which come alongside a business model that offers up unsecured loans. The amounts loaned tend to range between $5,000 and $250,000 to SMEs, which SMH said tends to be a range that is too small to be of much profit to a large bank and may not, in fact, be attractive enough to cover default risk.
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