Small business lending startup Prospa has reportedly secured a $20 million debt facility from the Australian arm of Partners for Growth.
The AFR reports that the new money, which follows a $25 million capital raising round in February led by AirTree Ventures, will go towards product development as well as potential acquisitions of other fintechs.
This is the second time Partners for Growth Australia made headlines this week, backing up from its role as debt partner to Sydney fashion rental startup GlamCorner’s $4.2 million capital raising round.
Partners for Growth Australia managing director Jason Georgatos told the AFR that Prospa had worked out the successful formula for online lenders — profitable distribution, reduction in cost of capital and credit management.
“Having seen many other [small-to-medium enterprise] lenders in the US and around the world, Prospa is one of the best at executing on the key KPIs that drive success in fintech.”
Prospa had $250 million in loans back in February, but after a bumper June quarter that total is now reportedly up to $400 million. The startup uses proprietary technology to facilitate its online loan application workflow, with lending approval and funds presented to customers within 24 hours.
The Sydney company has successfully made a living out of handing out unsecured loans to small businesses that big banks often do not take on without large security. The AFR reports Prospa has grabbed 50% of the “emerging market” for online business lending.