You’re sitting in the plush grey waiting room at the bank. It’s quiet, air conditioned and clean inside – but that doesn’t mean you’re comfortable. You’ve only been in the queue for fifteen minutes, but it took you and your partners weeks to put together your business plan and proposal.

You look down at the wad of neat little charts, graphs and figures in your folder. Suddenly, you’re hyper aware that it doesn’t really represent the heart, soul and potential of your business. Is the loan officer even going to understand what you do? Will your business loan get approved – and if it does, will it be in time? It’s more than a tad stressful.

But what’s the alternative? After all, each loan requires the same information and processes in order to be assessed, right? Well, not exactly…

What is marketplace lending?

Marketplace lending, often referred to as peer to peer lending (P2P), is a fresh new alternative to traditional bank lending. As the name suggests, it’s driven by market forces. Supply (of money and investment opportunities), and demand (for credit and favourable rates).

Marketplace lending organisations recognise that businesses have lots of choice when it comes to sources of credit. They also recognise that every business in every industry has its own unique circumstances. Circumstances that make it a better candidate for credit.

How is it different to what banks do?

Banks have strict criteria about who they can lend to. Traditional credit assessment techniques can rely on a very narrow range of information provided by financial statements. Often the quality and type of security being offered to support the loan is an incredibly important factor in determining the success or otherwise of the application.

Marketplace lenders look at financial statements too. But, unlike banks, they go deeper to look for other clues as to the individual business’s future potential. A marketplace lender may review social media data, online accounting software data and bank statements for real time assessment, and online industry market research.  They ask questions such as ‘what does market research tell us about the future of this local industry?’, ‘what unique, protected intellectual property does this business own?’, or ‘how will the loan transform the business’s potential?’

Marketplace lending defies tradition in more ways than one. Take Banjo for example, we offer a comprehensive online service. No more queuing up in a branch!

Why is it particularly great for small businesses?

For small and medium sized enterprises, a successful business loan is about much more than just getting your hands on the cash. It’s about the application process, timing, flexibility, the sense of understanding, accessibility, and the cost of credit. All attributes which are fundamental to marketplace lending.

As a marketplace lender, we simply get it. By focusing solely on the SME business community, and reforming the ingrained attitude to how credit should work, Banjo can deliver the all-round positive experience that small businesses have been missing from the big banks.

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^ This calculator provides an indication of typical average fixed fee (or interest expense) costs and repayments for working capital loans (but not other types of loans such as Banjo Express or Asset Finance). The actual fixed fee (or interest expense) and repayments will vary based on your individual circumstances. Fees and terms and conditions apply (including an origination fee on each advance of 1.5% for 6 months, 2.25% for 12 months, 2.5% for 18 months, 2.75% for 24 months or 3.00% for 36 months). The repayments set out above are inclusive of fixed fee (or interest expense). Fixed fee (or interest expense) accrues upfront and is paid in instalments.