The Small Business Lending Industry in Australia: A Research

SmallBusinessLoansAustralia offers prospective clients and financing industry professionals to have a glimpse at never-published-before statistics of the small business online lending industry in Australia.

The idea behind this research is to find the characteristics of Australian SME’s which have secured financing online, and analyse the reasoning. The data was provided by Lending Express for the period of July 15 until October 15, 2017.

We hope you would find this research interesting and insightful. We will continue collating data to keep this research up to date and accurate, as well as to expand the scope of analysis.

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You can also find an image version of this complete research here.

Australian Small Business Lending Data

 

Borrowers by State and Territory

The following graph will present the most popular states in which SME’s get their financing online:

 

 

As expected there is a very high correlation between the population in each state, and the number of loans required (and secured). Below you can find a graph showing almost 100% correlation between population and the number of online loans secured in the period.

 

 

When we analysed the data on the average loan amount by state we were surprised to see that the highest average belongs to NT, a federal Australian territory. Other than that, the average are pretty close to each other.

 

By Age of Business

When we look a the type of businesses which are looking for online borrowing, we are surprised to see only 33% of them are under 3 years.Our theory was that it would be mostly newer businesses that have difficulties securing financing from the bank that will revert to online lending.

That data could be distorted, of course. Lending Express, which have kindly supplied the data to us, work with very established lenders such as Sail, Capify or Prospa and these lenders are also not very keen to take on new businesses. So it is possible there were a lot more applications from younger businesses that went unanswered.

 

 

By Industry

The industries that are by far the most popular ones for online lending are in the automotive (including transportation),construction, energy, and above all retail / manufacturing. All other industries altogether aren’t anywhere close to these 4.

 

 

The loan amount varies very significantly per industry based on the needs. The Import/ Distribution industries aren’t among the most popular industries for online lending but when they do require a loan it’s normally for as twice as much as a business in the Agriculture or Art business.

Reason for Lending

As expected, the most popular reason to get a quick online loan is to pay salaries, followed by expansion, paying off debt, and buying stock or equipment, while very few SME’s would actually approach an online lender to borrow money for advertising.

In terms of loan amounts, the highest figure are for the purpose of debt consolidation followed by buying stock, and the lowest ones are cash-flow and equipment.

 

 

 

Statistics are based on clients who have used Lending Express to find online lenders in Australia in the periods of between July and October 2017. We do no guarantee accuracy in regards to the entire online lending market in Australia – Lending Express is a new contender and the is no sufficient sample size to reach statistical certainty. Still, we find this data extremely usable, actionable and hard to come by, so without any further adieu here are the statistics we have collected and analyzed.