Small businesses will be better able to apply and receive approval for business loans from the National Australia Bank, with accounting software company Xero partnering with the major financial institution.
Thanks to a reciprocal data sharing agreement, as of this month small business customers of both companies can lodge online loan queries to NAB from within the Xero accounting platform.
Sign up for SmartCompany newsletter.
Free to your inbox every weekday
The integration between Xero and NAB aims to remove some of the administrative burden for small business when it comes to compiling financial statements for loans by providing customer-approved data to NAB.
Xero opened the doors to increased interaction between small business and financial institutions in mid-August when it announced new integration agreements with institutions such as NAB.
NAB and Xero signed an expanded partnership deal in April which allows customers to access new services, including making enquiries for new business loans from within the Xero accounting dashboard.
Chris Ridd, Xero Australia’s managing director, told SmartCompany this morning the partnership with NAB, launched two weeks ago today, will make it easier for small business customers who bank with NAB and who often find the process of compiling loan information required by banks to be difficult.
He says the technology is a “win-win” for both small businesses and the banks, which are able to access credit quicker and form a richer financial picture of the small business customer’s situation.
“In case of NAB, they were really keen to get lending set up a lot easier and also ability for customer to have that faster turnaround,” he says.
Ridd says while it is early days, he is excited by the number of businesses interested in using the loan application option available on Xero.
“It’s only two weeks but encouraging,” he says.
“Certainly there’s been very encouraging signs with quite a number of applications. It’s showing some promise, we’re pretty excited about it.”
Ridd says Xero works with banks and non-bank institutions and is also in the process of finalising agreements with insurance provider CGU.
“In all cases, we’re coming back to data sharing where the customer can work with those providers and can opt into that provider to get access to that provider,” he says.
“What we’re doing is connecting financial service providers into accounting software and allowing customers to get access to these services much quicker.”
However, Ridd says “overriding all of this” is small businesses maintaining control of the data that is being shared.
“It’s really important the customer is in control of that data and there is a strong emphasis on privacy,” he says.
SmartCompany contacted NAB but did not receive a response prior to publication.