Since the beginning of 2014, we have seen a new wave of alternative lenders emerge, alternative lending has quickly become a significant force in the financial industry over the past few years. Business loans from alternative lenders are growing at a higher rate than traditional bank loans, as banks continue to change and limit the way borrowers can access finance.
The surge in the alternative lending platforms has paved the easy way for borrowers to access essential funds to develop an office building, hotel, apartment and residential development or building their business.
Additionally, a speed of agreeing on alternative funding is a huge benefit, as is the convenience of having an online system and not having to visit the bank.
They might not offer huge loan amounts, and interest rates might differ, but they manage to provide practically any business with some level of funding.
The greatest advantage of alternative lending solutions is being able to tailor the loan to your needs. It offers great flexibility and provides far more options to suit needs than traditional bank loans. Unsecured business loans take away the need for collateral and forces you to bank on the health and performance of your business instead – pushing you to do better as a business. If traditional bank loans don’t work for you, shop around for something that’s more flexible and that can be tailored to suit your needs.
According to the Cultivating Growth: The 2nd Asia Pacific Alternative Finance Industry Report, which surveyed 628 alt-fi companies, Australia overtook Japan in 2016 to become the second largest alt-fi market in the Asia Pacific, with a market volume of $US609.6 million ($780 million), up 53% on 2015.
The alternative finance market in Australia made some recommendations directed at increasing innovation in the new policy environment are helping to fuel growth in the sector, and played a significant role in assisting Australia to become the largest market in the region, after China.
No longer are large financial institutions the only funders in town – and in fact, many players are teaming up with the FinTech industry to make use of new solutions in the market.
Alternative finance loans have become so established that even traditional banks are offering to fund the alternative finance industry itself, instead of offering equivalent loans directly.
There have also been initiatives set up by the government which has invested hundreds of millions into the lending market. Much of this has been matched by private sector investors who are much more willing to invest in SMEs than the banks.
The big trends are having a genuine and positive impact on Australia’s borrower and property developers.