A huge two thirds of small and medium businesses that apply for traditional credit are rejected, according to research by Digital Finance Analytics. And with 1.5 million SMEs in Australia actively seeking finance, that’s almost one million small and medium businesses whose business model is challenged by limited access to finance.
As someone who grew up working in the family business, Aris Allegos knows all too well the challenges small businesses face when it comes to accessing capital. Allegos is the co-founder and CEO of Moula, one of the first non-bank lenders in Australia.
“(Working in the family business), I encountered first-hand the challenges small businesses face when it comes to accessing capital. I spent over 15 years working in finance in London, Hong Kong and Melbourne, but my background in the family business was still a big part of my identity,” Allegos told KBB.
And it was this grounding that helped Allegos find the perfect opportunity to make a difference to the lending space in Australia. Together with Andrew Watt and Piers Moller, Allegos launched Moula in 2014 – a technology platform that can approve small business loans online within 24 hours.
“The first challenge for many SMEs is providing security or collateral for the loan. If your business doesn’t have an asset, it’ll mean borrowing against your own home (if you have one) or being totally locked out of funding options,” Allegos said. And that challenge increases for e-commerce and online businesses, which may also have a limited track record or lack of physical presence.
So, rather than using collateral, Moula provides unsecured small business loans sourcing data from the likes of Xero, ATO, among others to analyse real-time sales data and performance history to determine whether applicants can repay a loan.
“Traditional business lending is based on a secured lend and requires significant paperwork and a lengthy turnaround time, typically 4-6 weeks. At Moula, our loans are unsecured and fast. The application process is entirely online and can be completed in under ten minutes,” Allegos said.
The increasing availability of non-bank lending is likely to be a welcome relief for time-poor small business owners, who no longer have to manage long application processes or ongoing reporting, and can apply for finance online at any time of the day or night. As well as the speed and convenience the non-bank lender offers, a unique technology platform and strong customer service focus mean Moula has established itself as a viable lending alternative for savvy small businesses.
“We built our own platform so that we could accommodate the unique nature of the Australian market,” Allegos said. “This means we’ve built a system that really understands the way Australian SMEs work. It also enables us to constantly innovate and adapt our technology so that we can better service them.
“Plus our customer service team is at the core of the business: they’re there to support our customers on every step of the journey. It’s the human interaction that sets us apart.”
While finance is critical to business growth, Allegos says it’s important not to forget about another important ingredient for success – people.
“Growing a business is all about investing in the right people. You can’t do it all alone, and I really believe that behind every great business is an awesome team. Hire the people who are passionate about your cause, and understand the vision, as well as the job. Build a team who can work with you, not just for you.”
Funding for Australian Small Business
If you’re an Australian SME in need of funding, Moula may be able to help. We provide business loans from $5,000 to $250,000 approved and funded in as little as 24 hours. Apply online or speak to a member of our team to discuss your options.