Tradeplus24, a Swiss alternative lender, is set to launch in Australia, after raising 120 million CHF (AUD$ 173.6 million) in debt and equity in February.
Former NAB general manager for business banking, Adam Lane, will lead Tradeplus24’s Australian operations as managing director.
“We’ve enjoyed immense and rapid success in our home market of Switzerland in just two years of operations, including attracting investment from the likes of Credit Suisse, SIX Group and Berliner Volksbank, but we always had global expansion in mind when we developed the business,” Mr Lane said.
Australia was chosen as Tradeplus24’s first international market due to “a significantly underbanked niche caused by alternative lenders typically not providing loans above $250,000 and traditional lenders struggling to structure cash flow finance smaller than $5 million”.
In addition, Mr Lane noted that traditional lenders in Australia typically require SME borrowers to use residential property as collateral. Compounding this issue is the nation’s ongoing housing market slump.
“Australia’s weakening housing market is also compounding the inability of business owners to secure funding by offering property as collateral for further borrowing, with many ‘running out’ of adequate security to offer,” the Tradeplus24 Australia managing director added.
Another reason why it made sense for the lender to expand into Australia, according to Mr Lane, is the credit squeeze brought on by the banking royal commission.
“The banking royal commission has put everyone on notice when it comes to credit; there is simply less of it flowing through the economy as a whole,” he said.
“These factors combined create an urgent need for more innovative business credit solutions which don’t require a borrower to put up property assets as collateral.”
Tradeplus24’s variable credit lines range between $500,000 and $10 million and do not require the use of residential property as security. Instead, the lender securitises and uses insurance to underwrite the account receivables of small and medium-sized businesses.
The lender’s technology assesses SME supply chain data and calculates risk down to individual invoices in real time.
Tradeplus24 said it is currently in the “advanced stages of negotiating a nine-figure debt facility”.