As Australian regulators continue to press the nation's largest banks for fairer small business lending practices, a new small- to medium-sized businesses (SMB) lending platform is headed for the market.
Australian Finance Group said Monday (Aug. 28) it is planning a soft launch of its small business loan platform, AFG Business. Announced during Australian Finance Group's financial earnings report, the solution will initially roll out in the second quarter of 2018 to help companies access commercial mortgages. The platform will eventually expand to offer asset finance and unsecured finance later in 2018, reports said.
"We'll be building an initial panel of up to 10 lenders aimed at the core [SMB] market," said Australian Finance Group chief executive officer David Bailey in a statement. "There will be simple training and direct accreditation for AFG brokers to help deliver streamlined, efficient business finance solutions."
Brokers only need basic training to gain accreditation to write commercial lending, Bailey noted.
In addition to the platform, AFG said it is also exploring white label solutions to offer its business lending platform to other financial service players. Across all loan products, AFG is currently working with more than 45 lenders and offering more than 3,400 different products, the company said, a reflection of the growing complexity with which brokers must deal, according to Bailey.
"Increased regulatory intervention in the market has driven more complexity in the market, which shows a greater need for broker expertise," he said.
Regulators have been pushing for traditional banks to introduce fairer contracts with small business borrowers, with Small Business and Family Enterprise Ombudsman Kate Carnell recently describing the process as "like pulling teeth" to get the banks to comply with new rules. Top FIs recently agreed to change contracts with small business borrowers, though the legislation requiring the contract changes went into effect months ago.
“The banks’ initial underdone response to the legislation serves as a reminder that [they] were once again trying to ‘game’ the rules, and this erodes trust,” Carnell said in a statement earlier this month. “It’s hard to understand why all these things are like pulling teeth. It came into effect last November, and it has taken my office and ASIC until now to take them to where they are pretty close to complying with a law that has been in effect for eight months.”