According to a statement by NAB, the major bank has created a digital application process allowing small businesses to borrow $100,000 without traditional security requirements such as property or cash.
Conditional credit approval can be granted within 10 minutes of the digital application, and eligible small businesses will be able to receive cash 24 hours after contracts are signed and returned, the statement said.
The announcement comes after RBA assistant governor Christopher Kent suggested that major banks were not doing enough to provide small businesses, entrepreneurs and start-ups adequate and affordable access to finance.
“Lending to small businesses is dominated by the major banks and there is less competition in this market,” Mr Kent said at a conference on Wednesday.
Because of low levels of competition, interest rates for small business loans had “remained relatively high”.
NAB executive general manager, business direct and small business Leigh O’Neill shared Mr Kent’s sentiments, stating that access to funds for small businesses was critical during growth or expansion periods.
“There is often a perception that access to credit is difficult without a property or other major asset to secure against,” Ms O’Neill acknowledged.
“That’s why we’ve responded by placing more emphasis on the strength of the business rather than traditional physical bricks and mortar, and we’re doing this at a fair and competitive price.”
According to the statement, there would be “no hidden surprises” with NAB’s interest rate fees, which were annualised at 13.85 per cent.
Ms O’Neill added that small business was the backbone of the Australian economy.
“We need all parts of the economy – big business, government and industry – to get behind them to move the country forward,” she said.
The $100,000 QuickBiz loan is an extension to NAB’s current services that encompasses “an overdraft and credit card, all unsecured and capped at $50,000 for eligible customers”, according to the statement.
NAB’s “unsecured solutions” allows for direct connectivity to Xero or MYOB data and promises the completion of application and decision in under 10 minutes.
