Category Archives: For Investors

Marketlend’s funding option GreenLend encourages green investment

This week The Fifth Estate is reporting about Marketlend’s new clean energy funding option GreenLend, which has garnered the participation of leading Australian renewable energy company Planet Ark Power. The new funding plan is on track to connect more environmentally conscious investors with green businesses.

 

Investors are increasingly looking to invest “beyond” their checkbooks and with their consciences, but they can also find it difficult to find and fund businesses that align with their values. In particular, many investors are seeking to invest in solar and renewable assets, while also looking to avoid big banks and high interest rates.

 

That’s where GreenLend offers a solution since it was designed to accelerate the expansion of solar capacity and other clean energy in Australia. It helps sophisticated and wholesale investors directly fund clean energy SMEs by offering them a special interest rate on loans from Marketlend’s investors.

 

According to founder and CEO of Marketlend, Leo Tyndall, Marketlend has always taken a long-term view when it comes to financing SMEs.

 

“We want businesses to thrive long into the future,” he says.  In fact, since its launch in 2014, Marketlend has funded over AUD$56 million to Australian SMEs. But GreenLend specifically targets Australia’s energy future by “ensuring today’s energy innovators get the access to capital they need so they can continue addressing one of the world’s most pressing concerns – climate change.”

 

SMEs can apply for funding on Marketlend’s online lending platform, and those businesses in the clean energy space will be marked with a special badge to help investors identify them. This will be based on criteria that will include supporting SMEs largely or wholly focused on clean energy, sustainable products, recycling and energy efficiency. Once identified as ‘green’, these borrowers receive an attractive interest rate of 8-9 percent while investors in these clean energy businesses will typically earn a return of between 5 percent and 7 percent.

 

The funding plan’s first borrower, Brisbane-based Planet Ark Power, has received a $500,000 loan from fifty investors through GreenLend. It will be use the money to improve cash flow, trade credit, and working capital. Planet Ark Power’s mission is to help businesses, governments, and individuals reduce their impact on the environment. Executive Director Richard Romanowski explains that the energy provider’s main focus is making renewable energy as efficient and hassle free as possible. The greater the uptake of renewables, he explains, the greater the benefit to the planet.

 

But in the past financial hurdles had hindered growth plans, which is why Marketlend’s GreenLend can help the company. The funding plan connects Planet Ark Power directly with investors, and helps the company rapidly increase recruitment and installation of more rooftop solar panels across Australia.

 

“In turn, we’re able to save households and businesses millions of dollars while reducing our carbon footprint – it’s game changing stuff,” Romanowski says.

 

While Planet Ark Power is one of the first companies to receive funding, Marketlend is uniquely placed to connect more SMEs with needed funding, helping them progress across their growth curve and achieve scale in ways they couldn’t before.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketlend Academy: collection protocols at marketlend

Listen to the CEO and founder of Marketlend, Leo Tyndall, explain Marketlend’s collection protocols and emphasize the importance of communication. If you want to read the full transcript, please see below.

 

 

Marketlend has discovered over time that – and it sounds strange – but time is your enemy when it comes to collections. The longer it takes for you to collect, the higher risk you have that there’s no assets left. So as a result of that, what we typically do in collections is this: If someone fails to pay, we actually have an alert system. We have three alert systems. We have an alert systems where we tell the client before it’s due to pay. We send them an SMS, we send them an email. If it doesn’t pay, they also get another alert, an SMS. On top of that, we will have one of our representatives call them and say, “Hey look what’s going on”, and understand it. That’s on the first occasion. If the representative can’t get through to them, we then have a second representative call them. So we have two of them chase them up.

 

Then after that, that’s within the one day. When it comes to the second or third day, we will try to rerun the direct debit, ’cause everything is paid through direct debit. And if that direct debit fails on the second occasion, then it moves to what we would say a more severe collection event. They are then put on what we call an alert system, which sends them out a message saying, “You’re on second direct debit. You do realize that you’re trading in solvent.” And then what we will do is within the next few days we will try to resolve it. If we still can’t get in touch with them, we forward it across to a collection agency, which is a subsidiary of QBE, and they will then take over the collections process.

 

If we think it’s futile even sending it to them, we will then do a thing like issue a statement of claim or a statutory demand which takes legal proceedings. And we move very quickly. We’ll have that done within 30 days. Depending on the amount, we’ll also investigate whether it’s worthwhile for us to actually send one of our representatives up there. Or if it’s a lower amount, we will send, we have an agency that sends a, what we call a field agent, and that field agent would go out there and do a report and tell us what’s going on. So what we do is- so that’s in the event that they’re not communicating. If they’re communicating, we will then see where they’re at. And if they make a promise, we will follow that promise. If they keep to their promises, great, they’re back on track. If they don’t keep to their promises, well then we escalate it further. And we engage our legal department and also an external lawyer.

 

Inadequate regulation of fintech leaves Australian SMEs at risk

Marketlend Academy: What have you learned about your investors?

Listen to Jane Lehmann, Marketlend’s Head of Investor Relations, share what she has learned about Marketlend’s investors.  If you want to read the full transcript, please see below.

What I’ve learned about our investors is because they’re experienced, sophisticated and/or institutional um, they are as the name suggest, well experienced in the sector so they understand the risks that they’re entering into. They have um a very good um business eye, very good business sense um will look at a particular um investment they’re or loan that they’re potentially um taking an interest in and can ask very informed and- and specific questions about the risk profile um at hand. And so its very important to us to ensure that we provide the responses and type of information that they need because we need to ensure they- we have their confidence um that the information that we provide that the facilities that we pulled up are- are the type of investment that would meet their needs and um their interest.

Marketlend Academy: what makes Marketlend unique?

Founder and CEO of Marketlend Leo Tyndall explains the significant differences that make the Marketlend platform so powerful and supportive for investors.  If you prefer, you can read the transcript below.

What makes Marketlend unique is that we’re able to give SMEs direct access to the capital markets, but in a secure and also price competitive environment. By using insurance, and also using loss reserves, we’re able to give the SME the benefit of those so therefore getting better pricing for them, and at the same time give the investor comfort that when they invest in an SME, that they have additional protection against the possibility of a loss. Now, matching … In, in, by doing this we use trade credit facilities, which is an unusual thing. In that, what we’re doing is, we’re becoming the owner of the goods. And then essentially what we’re finding is the SME’s able to then buy more goods and then within 90 days repay us, and therefore giving them an improved profitability so that they have a, a better, you know, cost of funds. And then also, giving them the ability to have money now versus waiting for 30, 60, 90 days depending on the type of facility. So it’s actually having the money to actually pay expenses or buy more goods and enable them to improve their profitability of their business.

How to get a small business up and running as a parent with a disability

According to the Centre for Applied Disability Research, people in Australia with disabilities have a 13 percent rate of entrepreneurship, a higher figure than employed people without disabilities. This reflects findings in similar countries like the US and UK, where people with disabilities are turning to entrepreneurship as an alternative to traditional employment.

 

There are many reasons why starting a small business is a great idea for someone with a disability, especially a parent. You have the option of working from home, where you can be with your children. You don’t have to answer to anyone in terms of your schedule or how much time you need to take for your health. Perhaps most importantly, you have the flexibility to design a career and an environment that is perfectly suited to your life.

 

However, Australia’s low employment participation rate for people with disabilities show that there is still a ways to go. Many challenges face parents with disabilities on the road to entrepreneurship, but below are just a few simple ways in which you can get the ball rolling.

 

Look at Alternative Investment Schemes

 

Traditional loans and investment schemes present many barriers for people with disabilities, but alternative options are available. Things like peer-to-peer lending make funding easier and more accessible to everyone and can be a great way to get an initial investment for a small business.

 

Alternatively, there are various government grants available for entrepreneurs. Most of these are not specific to those with disabilities, but they are still a potentially useful resource if you are looking to set up a business. Finder has compiled a great guide to the best government grants and how to go about applying to them.

 

Get Transport

 

If you can drive, invest in a good vehicle if you are going to be a self-employed parent. If you are selling physical goods, you will want a car, van, or truck to transport them, and you may also need to drive people (or children) around in your day-to-day. Check for good deals on second-hand cars on Gumtree to find the perfect vehicle for your business needs.

 

Be Online

 

Nowadays, any small business worth its salt needs to have a solid online presence. This means a well-designed website, as well as social media channels. While you can pay someone to set these up and even manage them for you, it’s not too difficult to do on your own. Beautiful websites can easily be created with simple drag-and-drop interfaces, and social media channels can be linked for optimal sharing across the board.

 

When you create your website, make sure it is accessible. As someone with a disability, you will understand the frustrations of non-accessible web design, so set a good example by taking time to ensure your website can be used by everyone. Dreamhost has some great tips for doing this.

 

Create a Great Home Office

 

Over half of small businesses are run from someone’s home, and it is easy to see why. As well as saving on rent, working from home is especially convenient for parents with disabilities who require an environment tailored to their needs.

 

That said, it is not enough to simply put a desk in a corner of your living room. A home office should be a separate space within your house, ready for everything you may need to do great work. Check out these tips for a productive home office, from comfortable seating to lighting.

 

Do not be scared of entrepreneurship because you have a disability. Running a small business can be the perfect employment solution for someone who requires flexibility, independence, and a tailored environment, so it is worth taking that leap and persevering. Remember that you are not alone: there are plenty of resources and help available online, and your friends and family will be happy to support you in any way you need as you start your self-employment journey.

 

Thanks to Patrick Young and ableusa.info  for this contribution.

 

 

Marketlend Academy: Why Marketlend is a “fierce advocate” for investors

In this video, Marketlend’s Founder and CEO, Leo Tyndall, explores why it is so important that Marketlend act as a “fierce advocate” on behalf of its investors, especially when it comes to protecting their investments.  Watch the video or read the full transcript below.

 

We see a very significant need for a number of things. One is, obviously, we always want our investor support, but we also see that we need to be very diligent in enforcing debt and very diligent in making claims on insurers and ensuring that they understand the true risk so that the investor gets his funds back to the extent that’s possible. Obviously, if we find that if we were negligent or we were lazy about that point in our business, well then essentially you could say the wheels will stop.

You know, we we essentially look after our investors in that we see them as an integral part of our business, and we do see that they are leaving it – not leaving it to us – but they are a lot of he ongoing servicing role and the like is left to us. And they don’t want a situation where they put the money in and then they think that we’re sitting there, you know, having coffees in the background and not doing much and really not diligently ensuring that people pay on time, when I’m diligently actually collecting on debt or we’re not going to the insurer and advocating the case as to why they should pay.

And one of the things I think is very important there, it you look at the Royal Commission and you look at with banks now or you look at say, for example, the AMP scenario, you know shareholders is a bit of a similar example. Shareholders would like to think that AMP was doing the right thing for them. Not just protecting them, but also protecting the business. And then to discover that they weren’t and they were actually doing things that were contrary to the business. That’s something that we don’t want to ever be seen doing and we’re very cognisant of the need to do so.

And that’s why we do things like have a due diligence done by Deloitte every year. And that’s why we also have people like Clifford Chance review our legal documents. And that’s why we always invite investors, you know the larger investors do their own due diligence, and other investors while we have regular catch-ups or webinars or other items like that to really show them that we’re doing. And that’s why we have a newsletter to keep them updated as to what we’re doing.

Marketlend Academy: how to know if your hobby should be a business

5 Questions to Ask Yourself Before You Turn Your Hobby into a Business

 

• Is your great idea a hobby or a business?

 

When avid Australian gardener Matt Harris became frustrated with traditional plant watering methods, and the pests eating at his produce, he invented a self-watering, enclosed system called Vegepod. In 2016, Harris scored both publicity and an investment on the Australian version of Shark Tank. Since then sales have increased by more than 500 percent.

 

When Harris first come up with his idea, how could he have been sure it had the potential to become a business? Not every entrepreneur necessarily needs a huge investment to make a business work, but most beginning entrepreneurs will often find themselves wondering when their idea or hobby is ready to become a business. Whether you’re just at the idea stage, or have started selling already, answer these questions to help you decide whether you’re ready to hang a professional shingle.

 

• Can it make a profit?

 

 

If you want to make a career out of your hobby, first figure out if your idea can generate revenue. After all, a hobby is personal, but a business is commercial. There is also a difference between just making money, and making a profit. Write a business plan and crunch the numbers. Anticipate your revenue and expenses. Will you be in the black? Will you be enough in the black to make a living at this enterprise?

 

 

• Is there a customer base?

 

 

If you haven’t begun selling yet, don’t assume that just because you love your own idea that others will too. Conduct some market research to identify who would be willing to spend money on what you’re offering. Take advantage of social media and online survey tools to find your target audience. If you’ve identified a clear interested audience, then it may be time to test the waters by selling your product directly to that audience.

 

 

• Is there demand?

 

 

Identifying your audience goes hand in hand with demand. Signs of high demand include more sales than you are able to fulfill right away, overwhelming requests or positive comments online or on social media, or if you’re having to turn away customers because you’ve got more orders than you can fulfill. If you’re so busy trying to fulfill orders that it’s taking over your life, and you still feel like you’re falling behind, that’s a clear sign that people really want your business. This is the time to invest in your business and help it grow.

 

 

• Are you cut out for running a business?

 

 

Even if you’re sure that your business can make money, and you’ve identified both an audience and demand, your business will never take off if you don’t have the time to devote to it. Running a true business will require a full time commitment, and sometimes even more than that. Ask yourself first if this is something you’re willing or able to do. Not everyone is cut out for running a business. Signs that entrepreneurship is right up your ally include a desire to have a personal stake in what you’re working on, a dislike of rules, comfort with working hard, a tendency for seeking out problems and solutions, and a preference for independent thinking and a strong desire to be your own boss.

 

 

• Are you comfortable with risk?

 

 

Starting a business is by nature risky. Even if you truly believe in idea will make millions, there is always the possibility that your business will fail. But risk isn’t necessarily bad. The best businesses are often founded after multiple failures, so to get to a successful business probably means failing several times along the way. Be prepared for this. But make sure that this is a risk you’re willing to take, both from a financial and personal standpoint. Also be smart about taking the risk. Taking calculated risks means that you’ve planned every single detail, conducted all the research, and collected all the possible evidence that your business truly has potential. As long as you’ve done that then give it a go. Remember, you can’t learn to walk without falling.

 

Marketlend Academy: What is a loss reserve and how does it work?

Watch Marketlend’s Founder and CEO, Leo Tyndall, talk about Marketlend’s loss reserve, a important feature that protects investors.  The text of his comments appears below if you prefer to read.

So a loss reserve for us in Marketlend is actually built on the basis of protecting against the possibility that we have someone who falls in default and therefore there is a differential or shortfall between say, in an insured position, the amount of insurance that’s paid and the amount that’s actually, essentially owed or in the case of an uninsured it’ll be that the assets themselves don’t sufficiently cover the shortfall to the amount that’s been advanced to the borrower himself, or the account holder. What we do with the loss reserve is, is that we essentially collect that loss reserve and if the actual borrower has paid on time at all times, they’ll get their loss reserve deducted off their balance when they owe the money.However, what we do do is, we actually hold that in a separate trust account and we enable that loss reserve to be assisting investors to actually protect against that additional risk they have that the insurance may have a shortfall. Not significant but, or that the actual underlying assets and the guarantor guarantee situation isn’t sufficient to cover that. As well as, possibly the fact that it takes a lot longer to actually collect the debt so therefore there is a need to cover that cost during that time.

Marketlend Academy: how to protect your business in a housing downturn

The state of the economy affects every business, especially small and medium sized enterprises. One issue that could be of particular concern for business owners is the recent decline in home prices.

 

Housing Market Conditions in Australia

 

Higher mortgage rates, increased lending regulations and financial scandals have led to a sharp decline in housing prices in the Australian market. Australian home prices have dropped for 11 months in a row, resulting in a 2% annual fall, the sharpest decline in property values in six years.

 

This is a business issue, as well as a homeowner issue, because reduced home values could have a serious effect on the financial interests of small and medium-sized businesses and, perhaps more importantly,  their access to capital.

 

Impact of Reduced Property Values on Australian SMEs

 

A Duke University report states that “improvements in collateral values ease credit constraints for borrowers and can have multiplier effects on economic growth.” However, what happens when the opposite occurs and there are declines in collateral values? There are several ways that lower housing prices impact Australian businesses due to lower financial leverage.

 

Small and medium-size business owners in Australia may find it difficult to get financing from banks to start their companies, which is why it is fairly common for them to use residential real estate as collateral. The home’s value serves as protection for the lender in case the borrower is not able to repay the loan.

Previous property booms have facilitated lending, but the recent reduced property values will make it increasingly difficult to use homes as collateral to obtain small business loans. It will also be harder to utilize home equity lines or cash-out refinancing to finance startups or fund operations. Finally, the value of the guarantor’s personal assets will be lower, thus inhibiting their ability to use personal guarantees to secure business loans.

 

Strategies to Protect Business Assets Amidst Financial Instability

 

• Separate Personal and Business Finances

The first step to protect your business amidst lower housing prices is to separate personal and business finances. Many Australian entrepreneurs have one bank account for dual purposes, which can put their personal assets at risk in the case of bankruptcy.

Linking your finances can also be detrimental to the business—if the lender observes that higher interest rates make it challenging to repay a mortgage, they may be less likely to offer new business loans. Alternatively, if a business is struggling, a lender may be unwilling to keep it afloat if there is insufficient property value to be used as collateral.

 

It is best to use different bank accounts and credit cards to separate business and personal finances. This will also make it easier to track businesses expenses and use them as tax deductions at tax time. While some expenses may overlap, such as car usage or a home office, designate a percent usage for business and pay it out of the specific account.

 

• Utilise Secure Loans from Personal Funds

Many business owners use personal savings as capital injections to fund their businesses. However, should the company face financial constraints and go bankrupt, the investments will never be returned.

A better alternative is to make a secured loan to the business, using personal assets as collateral. Although this choice also carries some level of risk, if the business declares bankruptcy, the funds may be recovered through a liquidation. Additionally, there may be certain tax advantages for repaying a personal loan.

 

• Maintain a Strict Budget

 

Businesses that are not properly budgeted for will likely require more cash infusions to sustain them through tough times. As it will likely be more difficult to obtain small business loans due to lower home values, it is important to maintain and stick to a budget for your business.

 

Keep detailed data about your spending and earnings and pay yourself a set salary—these steps will help you to understand your business expenses and anticipate and save for the future.

 

Financial concerns that affect SMEs are really everyone’s concern, since 90% of all Australian companies are small businesses that account for 33% of the country’s GDP and employ over 40% of its workforce. The current state of the housing market will no doubt affect entrepreneurship in Australia.  However, with proper planning and implementation as well as guidance from a business attorney and a financial advisor, business owners should be able to sustain their companies and find funding for new business ventures.