National Australia Bank has entered the online SME lending market with the launch of the NAB QuickBiz Loan, which allows customers to borrow up to $50,000 in unsecured funding via a new online application process.
Developed by NAB’s in-house innovation hub, NAB Labs, the online platform uses financial technology to assist with the loan application process and states that customers will have money in their account within three days of NAB receiving their signed loan document.
The QuickBiz Loan carries a fixed interest rate of 13.85% for terms of either one or two years. The loan is repaid by monthly principal and interest payments and there are no application or ongoing fees.
According to Angela Mentis, NAB group executive for business banking, “in the early days of business ownership, small businesses often only require small amounts of funding – and many owners don’t have a property or other significant assets to secure a loan against. We’re responding to these customer needs, placing more emphasis on the strength of the business rather than traditional physical bricks and mortar security.”
Jonathan Davey, executive general manager of NAB Labs added the NAB QuickBiz Loan is “another example of the bank’s agile approach to meet customer needs”.
Meanwhile, Canstar’s research manager Mitchell Watson says “from NAB’s point of view this is a move to help stem any loss of low-risk customers to smaller, more agile competitors.”
According to Watson, “the advertised 13.85 percent does seem to be a fair interest rate”, given it is lower than the 16% being charged by the Commonwealth Bank’s Simple Business Overdraft. However, it should be noted that an overdraft is a more flexible and expensive loan product than a principal and interest loan.
