Small business lender Prospa says it’s positioned to help the SME sector recover from the COVID-19 pandemic, despite unveiling a 10% fall in processed loan applications, to $450.9 million, for the year ended June 30.
Posting its financial year 2020 results on Thursday, Prospa said its business had been impacted by challenging economic conditions facing small businesses, but that customer repayments have been “better than expected” since the end of June.
Prospa booked a $19.5 million earnings (EBITDA) loss on Thursday, up from the $800,000 recorded last year, driven by an $18 million provision outlaid for potential credit losses associated with the pandemic.
Prospa’s chief executive Greg Moshal said the business had nevertheless successfully navigated “unprecedented challenges”.
What will the election mean to you?
Sign up to our free newsletter, including this weekend’s coverage of the election.
“Early on, we took swift, decisive action to mitigate the impact of COVID-19 on our business and put in place measures to support our people and our customers,” he said in a statement.
“We will continue to leverage our industry-leading knowledge of the small business economy, and we’re confident the actions taken over the last 12 months have positioned Prospa well to support the recovery in this sector.”
Prospa will need to deal with increased competition over the coming period though, with both Commonwealth Bank and ANZ bank unveiling their own digital unsecured loan services yesterday.
Both banks are looking to cash in on demand for unsecured loans that can be granted on quick turnarounds amid the COVID-19 pandemic, with the federal government still offering to adopt 50% of the risk on such lending.
Commonwealth Bank is promising to grant loans up to $50,000 to SMEs within 20 minutes, provided they meet a range of stated criteria.
ANZ, meanwhile, says it will grant loans up to $200,000, approved within 20 minutes.