Category Archives: For Investors

A better situation for SMEs – Key findings of Sensis December Index 2014

A better situation for SMEs

SMEs’ ability to access finance is critical for capital expenditure and
growth. On balance, SMEs found it a little less difficult to access
finance last quarter and more were successful if they tried.
Last quarter (August – October 2014)
Almost as many SMEs perceived accessing finance to have been
relatively difficult (23%) as relatively easy (25%). However this was
an improvement as the net result was -9 last survey.
SMEs in SA were most likely to say it was hard to access finance
(-15) with those in Tasmania the most positive (+12). Across the
sectors hospitality (-17) as well as health and community services
(+20) stood out.
Only 12% of SMEs indicated an attempt to access finance, down
5 points since last quarter. However, of those 70% had success
compared to 56% previously.
Only in NSW was there a below average incidence of SMEs seeking
finance during the quarter (5%). SMEs in manufacturing (25%) and
the wholesale sector (24%) were the most likely to have sought finance.

Key issues emerging this quarter Sept 2014- December 2014 for the small and medium sized businesses in Australia – Sensis

Key issues emerging this quarter for the small and medium sized businesses

The mood of Australian small and medium sized businesses is somewhat subdued, and a recovery in 2015 looks patchy and stuttering. There is a lack of improvement on most measures. Meanwhile, performance and expectations vary considerably across metro and regional areas, states and industries.
•Overall,  51% of small business owners are feeling confident about the year ahead, down from 53% in the September SBI.
•A quarter are worried about their prospects for the year ahead with subdued consumer spending and sales the major causes of concern.
•Business confidence was one point lower (at a net balance of +27*) than the previous quarter.
•SME’s prognosis of the economy a year from now is six points lower than the previous quarter.
•There is distinct variation across the states with confidence on the up in Tasmania (24 point gain), Victoria (a 10 point gain), South Australia (up 5 points) and Western Australia (up 3 points) and dropping in ACT (down 12 points), NSW (down 13 points), Queensland (down 5 points) and the Northern Territory (down 3 points).
•Regional SMEs are the main source of declining confidence; doing it tough in many areas when compared with their metropolitan cousins.
•SME’s views of support for small business from the Federal Government remain negative, and are still below the level recorded after the last election.
•Across the states and territories, the Queensland Government is the state government seen to be the most supportive towards small business while South Australia continues to be well below every other state.

Overall the indicators show that confidence failed to continue the improvement shown in the previous quarter when confidence bounced sharply. While some areas show small improvement, these remain weak, and there is now less optimism about sales and profitability in the short term and for the rest of 2015.

Source: Sensis 2015

Marketlend can accept credit card payments for application fees and loan payments

Whilst it is preferred that borrowers pay loan payments by direct debit and a direct debit authority is executed at loan application stage, in exceptional circumstances, Marketlend will accept credit card payments.

Marketlend can also accept credit card payments for application fees. All credit card information is handled pursuant to the local regulations.

Marketlend has a direct portal to its bank for credit card payments and is charged 1.4% merchant fee and 10 dollars per transaction, payable by the borrower. NO other charges are charged.

All credit card information is securely held and only accessed by authorized personnel.

Marketlend offers a new solution to Institutional Investors

In December 2014, Marketlend launched in Australia, and has begun to build a pipeline of business loans. Using securitisation methodology and developed software tested in the UK market, it is set up for economies of scale.

Offering business borrowers direct access to investors is its theme, and it offers a safe and transparent investment environment to the investor.

Marketlend purchases the subordinated debt, the first loss piece, and offers a hands on solution for the matchmaking of borrowers and lenders.

For institutional investors to acquire small business loans, working capital and commercial property loans originated by Marketlend, Marketlend offers a tool called “Invest Now”.

At Marketlend, large institutions can create an account and have their own trust that purchases securitized loan or a loan package in the form of bonds from Marketlend on an automated basis, using the Invest Now option and receive monthly or daily principal and interest payments.

CEO and Founder, Leo Tyndall says:

“Marketlend has designed a system that reviews the eligibility criteria of the investor and randomly selects the loans or parts thereof that are to be financed through the marketplace “

“This solution also offers surety in funding, and quicker turn around times for borrowers”

“it revolves around diversity and spread of the risk, each investor is issued bonds where underlying security is the loan. The loan is in its own trust and has its own independent trustee and security trustee.”

Unlike Society One, RateSetter and upcoming startup Money Place, Marketlend only lends to small businesses and believes its loans are most used for growth purposes as opposed to debt consolidation or for personal reasons.

Marketlend enables institutional investors to provide warehouse lines.

Loans are priced based on the risk grade and a bidding process by the investors, after a range relevant to the risk is set by Marketlend. The risk grade is determined using the company’s proprietary credit-scoring tool that analyses large volumes of publicly available data and individual factors to evaluate the credit risk.

Five Peer to Peer Lending Predictions for 2015

Five Peer to Peer Lending Predictions for 2015 – Lend Academy http://bit.ly/1zS5ziN

Financial System Reform – Recommendation 18- facilitate crowdfunding for debt – SME finance – Marketlend well poised for the future.

Financial System Review – click for the full report

Government should continue its current process to graduate the fundraising regime to facilitate securities-based crowdfunding. This would enable entities to make public offers of securities to a potentially large number of people (the ‘crowd’). The risks associated with crowdfunding investments would require some adjustments to consumer protections, including capping individuals’ investments and clearly communicating the risks.

Government should then use the policy settings for securities as a basis to assess wider fundraising and lending regulation to ensure it facilitates other forms of crowdfunding, including peer-to-peer lending.

A range of crowdfunding models are emerging globally. Crowdfunding facilitates the funding of projects or businesses, where small amounts of money are raised from the ‘crowd’ via an online facilitator (or platform).⁶⁸ Financial crowdfunding models include:

• Securities-based crowdfunding, where the ‘crowd’ invests in an issuer in exchange for securities — either equity (crowd-sourced equity funding, CSEF) or debt.⁶⁹
• Peer-to-peer lending, where an online intermediary facilitates lending between individuals, often in the form of unsecured personal loans, potentially to fund a business.⁷⁰

Objectives

• Graduate fundraising regulation to facilitate innovations in fundraising emerging from new technologies and ensure policy settings are consistent across funding methods.
• Provide firms, particularly small and medium-sized enterprises (SMEs), with additional funding options.

 

Financial Reform Recommendations for allowing the development of crowdfunding options for business to access

Article by Neil Slonim – Financial Reform Report released on 7 December 2014

If adopted, the financial reform recommendations made by the team headed up by businessman David Murray could usher in some of the biggest changes to Australia’s banking system in recent history.

The recommendations are broad, but the key ones impacting small business are those calling for super funds to drop their prices and the government to relax rules around governing crowdfunded equity.

The big banks will be required to hold much more common equity capital against their mortgage business if the inquiry’s recommendations are adopted, while financial planners would need to hold a relevant tertiary degree and be able to prove their competence in managing superannuation.

The inquiry has recommended a ban on self-managed super funds borrowing to buy assets and says the corporate regulator, the Australian Securities and Investments Commission, should be granted more power to crack down on white collar crime.

Numerous professional bodies expressed their support for the recommendations yesterday, including CPA Australia, whose chief executive Alex Malley said in a statement that the report “addresses some of the fundamental issues facing Australia’s financial system and signposts some of the critical work that needs to be done”.

“Recommendations for allowing the development of crowdfunding options for businesses to access, the establishment of a new ‘innovation collaboration’ and an emphasis on removing unnecessary regulatory impediments to innovation all have the potential to help business prosper,” said Malley.

However, SME banking expert Neil Slonim says that the 2.1 million small Australian businesses have missed out.

Slonim, who heads up advisory firm ‘The Banking Doctor’ told SmartCompany the report’s lack of specific recommendations relating to the SME banking sector is “disappointing”.

“There was really nothing specific in the 44 recommendations that related to SMEs and startups, other than a generic statement that the inquiry wants to encourage the development of crowdfunding and peer-to-peer lending, which would potentially give SMEs more funding options than they currently have,” says Slonim.

“But other than that, there is really very little if anything else in the inquiry that would give SMEs hope they would get better access to funding.”

Slonim says the two key banking issues facing SMEs are a lack of access to finance and the need for greater competition between the big four banks.

“The inquiry makes some recommendations that would level the playing field between the big four banks and smaller providers of mortgage finance, which will help the consumer sector, there is nothing similar for SMEs,” he says.

“There is a lack of genuine competition between the big four banks, which control more than 80% of the marketplace, in an environment in which it is very difficult for smaller players to compete for SME business.”

And while the Murray report recommends that the government extend protections from unfair contracts for SME loans, Slonim says that “assumes” small businesses are able to sign a contract with a lender in the first place.

Slonim believes it is likely the government will adopt most of the recommendations contained in the Murray report, but says there will be another period of consultation with Treasury before the government officially responds at the end of March 2015.

“Joe Hockey will now be lobbied by all and sundry, particularly the banks” he says.

Marketlend – New Theme Picture

Marketlend new theme picture

We have also have established our new theme picture, meaning new kids shining light on a stagnant banking industry

Trust Documents executed by Trustee, Marketlend, Tyndall Capital and Jardine Lloyd Thompson

In a first for the peer to peer industry, Marketlend from inception is operating a securitisation trust structure to offer investors the most secure and protected funding opportunity available.

Master Trust Deed, Security Trust Deed, Sale and Origination Deed, and Back Up Servicer Deed were executed on 24 December 2014.

AET, a wholly owned subsidiary of IOOF, who manages approx. 123 Billion of wealth funds in Australia was appointed the Trustee, and Security Trustee.

Jardine Lloyd Thompson, listed on the UK stock exchange will perform the role of back up servicer.

“We have structured our lending platform with a solid foundation, that will be built to last. From the mom and dad investor to the large financial institutional investors, all investors are protected and purchase a secured bond where the underlying asset is a loan in the trust or part thereof if the investor wishes. These notes will have the traditional trading aspects to them, and whilst liquidity take a while to build, the notes are tradable instruments in the capital markets.” Leo Tyndall, Founder and CEO.

An interview with Marketlend CEO – Leo Tyndall

Interview with Marketlend CEO – Click here to listen

 

Marketlend is a new Australian lending platform founded and led by Leo Tyndall.

Launched in the same week that the Financial System Inquiry (FSI) of Australia released its “blueprint” for the Australian financial system for the next ten years, this new platform shows how innovation in financial products is  global.

We were lucky enough to get a chance to speak to Leo in the week of his launch.

Leo provides us with an interesting insight as to how Marketlend is a necessary addition to the Australian business finance marketplace and what makes its offer so distinctive.

The FSI report is generally encouraging towards crowdfunding and new and novel approaches to finance and we can be sure that where Leo’s team lead others will certainly follow.

You can stream the interview from here, our Podbean account or download it for later listening