Almost a quarter of start-up loans from the ANZ bank are unsecured, with the bank’s national general manager for small business, Nick Reade, telling StartupSmart today it’s open to backing strong start-up ideas.
“About 25% of our lending in the start-up space is unsecured, and that’s where we’re taking a risk on a business idea. The thing about the start-up market is there are no proven financials. No start-up can guarantee they’re going to make what they say they’ll make,” Reade says.
Reade says while they always need to make sure the debt is serviceable, a strong business plan can go a long way.
“If it ticks the boxes in terms of sustainable business with good prospects, if it doesn’t have assets, we’re open to looking at it unsecured or partially unsecured,” Reade says.
ANZ recently launched a banking package targeted at start-ups in their first year of operation.
“We’re very keen to support start-ups through their growth, and we’re starting to get there. Costs are an issue when you’re getting going. We’re trying to make it a bit more inexpensive,” Reade says.
The package offers waived everyday business account fees, a 50% discount on annual credit card fees, and waived application and monthly service fees for merchant accounts. It also includes a 50% discount on eftpos terminal rental fees.
Reade says sometimes the many components that make up a service fee such as merchant account fees or credit card fees are misunderstood.
“There are a number of different elements that come to the price that is charged. There are hardware and telecommunications costs, banks costs and the credit card scheme fees. While only one fee is better, you don’t always understand the components,” Reade says.
Reade adds start-ups need to do their research and come prepared with a clear business plan and cashflow projection, as these are mandatory for the assessors.
“ANZ is very active and open for business in the start-up space but, equally, if you’re a start-up and walked into the branch with an idea without any thought gone into it and preparation, we’d probably ask you to walk away and have a think about it,” Reade says.
“It goes to the heart of how prepared you are and how solid the business is because you need these things anyway, so I don’t think it’s too much to ask for.”
Reade adds that as they look after thousands of business accounts, they’re across industry benchmarks and can use that to assess and support start-ups.
“We need the facts and we have the experience to see where someone isn’t giving us all the information, or overstating or understating something. It’s in your interest to be up front,” Reade says. “We can work with that and help you out when we know what the challenges are. When there is a sense of info being withheld, that doesn’t go well.”