Prospa Review for Potential Borrowers
This review of Prospa Business Loans will help readers gain a better understanding of Prospa – the leading online lender in Australia. We look at how Prospa became the Financial Times 2018 fastest growing business in Australia, and the factors that differentiate Prospa from their competition. This Prospa review will also detail the products available through Prospa.com and the requirements that Prospa asks of all potential borrowers.
Prospa Review – Basic Figures for 2021
|📝 ABN:||47 154 775 667|
|📝 Credit License:||154 775 667|
|💰 Loan Amount||$5,000 – $300,000|
|⏲️ Loan Term||3 months – 24 months|
|💸 Unsecured Loans?||Unsecured Loans are Available|
|⌚ Lender Requirements|
*only for loans above $100,000
|⏱️ Response Time:||Approval normally within one hour. Money in the bank in 24h.|
|🌝 Easy to Apply:||Yes, fully online (expedited application here)|
|💌 Online Reviews:||4.9 / 5 Trust Score on TrustPilot (94% Excellent, 5% Great, <1% Average, <1% Negative)|
i.e. 99% approval rate on TrustPilot over 7,000 reviews.
|🏆 Awards and Recognition:|
|💳 Minimal Interest Rates:|
|⚖️ Comparison||Compare Prospa with 20+ Australian Lenders on Lend.com|
Prospa Reviews and Ratings
Full Review: Table of Contents
|Table of Contents|
Credibility & Company Story
In Detail: How Prospa Started
Prospa Advance Pty Ltd (trading name: Prospa, often named “Prospa Lending” or “Prospa Funding”) was founded in December 2011 by Beau Bertoli and Gregory Moshal, with the company headquartered in Sydney, Australia. Having both been business owners before, they knew just how difficult it was to secure bank funding – the whole application process would take around 6 weeks with the outcome often being a rejection. It was clear the loan options for small businesses just weren’t good enough so Prospa was founded. Nowadays, both Beau and Gregory as co-founders are still involved as executive directors of Prospa, a testament to its startup and fast growth culture that’s at the heart of everything Prospa does. The company’s official website is www.prospa.com.
How Did Prospa Become an Industry Leader?
Prospa Loans is one of Sydney’s best known lenders, and coordinately – Australia’s leading business lenders. Their online application process is streamlined and their response and funding time are both in 24 hours or less. In many cases, the funds are received the same day borrowers apply.
Prospa has a 97% approval rating and has been recognized with countless awards, including winner of the Finnies Awards for Excellence in Business Lending, 2020, and the number one spot in the Financial Times 1000 High Growth Companies in 2018 for Asia Pacific. Prospa has grown to a business of over 200 employees, hiring some of the best tech talent in Australia. It is regularly awarded for being an excellent company to work for, picking up the AON Hewitt Best Employer in 2017 and 2018. And reaching the final of the Australian HR Awards for Best Workplace Diversity & Inclusion Program in 2020.
Prospa is committed to improving the way small business owners experience finance. As Australia’s #1 online lender, Prospa has now funded more than $1.5 billion to over 28,000 businesses. Their application process is entirely online, and they work to make it easy for applicants to access the funds they need. As lending has become increasingly problematic for small businesses in Australia, Prospa has continuously worked to simplify how their own lending process operates. They’re recognized as a FinTech that’s changing the game for many – having been interviewed by several publications and awarded several honors for their innovative work in the finance industry.
Credibility Score: ⭐⭐⭐⭐⭐
Leading Private Investors in Prospa
The source of Prospa’s funding had been primarily from private equity firms that completed 4 separate funding rounds in its earlier years. The most recent was done in July 2017, designated as ‘debt financing’.
Propsa completed a private capital raising of $20 million as part of its expansion and growth plan aimed at extending its business operations, adding staff and conducting further sales and marketing with a view to growing its client base.
Overall, Prospa’s venture capital investors include:
Entree Capital (UK) http://www.entreecap.com/
Entrée Capital is a London-based venture fund that funds multi-stage startups and companies all over the world.
Partners for Growth (US) http://www.pfgrowth.com/
Partners for Growth (PfG) provides custom debt solutions to private and public technology and life science companies.
AirTree Ventures (AU) http://www.airtree.vc/
AirTree Ventures is a group of experienced investors and entrepreneurs based in Sydney.
Square Peg Capital (AU) http://www.squarepegcap.com/
Square Peg Capital aspires to be the leading Asia Pacific based investor in venture and growth stage online and technology companies.
Ironbridge Capital (US) http://www.ironbridgellc.net/
IronBridge Capital Management helps clients with investment management.
The Carlyle Group http://www.carlyle.com/
The Carlyle Group is a Washington-based private equity firm that caters to early and later stage companies.
Since 2017 Prospa received no further private investment as it was widely mooted to be building up to an initial public offering. And this is exactly what it did in June 2019, registering on the Australian Securities Exchange and raising more than $100million – valuing the company at $610million. The majority of the funds raised were used to fund the equity portion on Prospa’s high growth loan book but also on product development and geographical expansion. No surprises then to see Prospa formally launch its lending services in New Zealand and its line of credit product later in the same year. In 2021 the firm announced plans to expand its product offering even further and launch a range of cash management solutions to SMEs, although exact details of this are still yet to be confirmed.
In Detail: What Prospa Does
Using a smart proprietary technology platform and a simple online application process, Prospa gives small business owners a fast and easy way to access finance and has already provided loans to thousands of Australian small businesses.
Prospa offers straightforward small business loans as well as a line of credit for business owners.
Small business loans can be anywhere from $5k – $300k whilst a line of credit can be anywhere from $2k – $150k. The business loan will provide one lump sum for borrowers to pay back with a regular payment schedule whilst the line of credit can be used and reused throughout the 12month term.
There are no hidden fees for a Prospa loan and borrowers will have clear detail of all of their fees at the onset of the loan. Rather uniquely, not only is there no early repayment fee, but if borrowers repay their loan early, Prospa will provide them with a discount on the remaining interest which is payable on the loan. The level of discount will depend on how far borrowers are into their loan, but providing they’re not in default, will be at least 25% of the remaining interest payable on the loan.
Unsecured loans are offered up to $100,000. Prospa does not take “security” for clients to access loaned funds up to this amount for either their standard loan or line of credit. Security is required if clients fail to adhere to their loan contract document and for loans of over $100,000. Prospa takes security in the form of a charge over assets. Prospa does not generally take a mortgage over a borrower’s home, although it could be considered as part of the asset-based securitisation process.
Asset-based borrowing is when a business owner uses an asset they own to secure a loan. The asset can be either a personal asset like the family home, or a business asset like a truck or piece of equipment.
Prospa business loans have no compounding interest, no penalties for early repayment and no additional fees (as long as clients keep up with repayments on time – missed repayment fees are common in the industry).
After reading through this Prospa review, we recommend giving Prospa a try by clicking on the button below.
Flexibility Score: ⭐⭐⭐⭐⭐
Prospa Business Loans Client Reviews
Clients love Prospa. This is their main selling point, and in all honesty, one of the reasons we think so highly of the Australian lender. Below are the Prospa review statistics aggregated from across the internet:
- TrustPilot Australia: 6218 Reviews, 94% Excellent, 5% Great, – 4.9/5 Total Score (Excellent)
- TrustPilot New Zealand: 806 Reviews, 95% Excellent, 4% Great – 4.9/5 Total Score (Excellent)
There are many Prospa reviews to be found online with over 99% of them positive. Customers praise various aspects of the process:
One of the best loan services out there. Quick, responsive and got the approval done in a few minutes”.
The team were by far and away the easiest Ihave ever dealt with. A quick answer and also a very quick actual process time, unlike others. Would recommend to any future client without hesitation”.
“Small business saviours – highly recommended. This is my second time using Prospa and I couldn’t be happier… Prospa have been a godsend and the interest rates are far more competitive than that of traditional lenders. Also they understand and support small business, who have different criteria when requiring a lender””
To Prospa’s credit, less than 1% of Prospa’s customers report a bad experience. There is one user who reports a bad experience from an interaction with an account manager, another who felt the rates were too high and one user was unhappy with their repayment schedule. In the negative review criticising Prospa’s rates, an update on May 1st 2021 mentioned an $85 dishonour fee (usually charged if a loan repayment/direct debit is unable to be taken from an account) and a $17 daily late repayment fee. Whilst the penalty fees are quite high, it’s quite common for short term business loans and Prospa has responded to the review to say that absolutely all of its fees are outlined in the loan summary sheet before the borrower signs the agreement.
Given the current times, it’s remarkable that only a handful of the 7000+ Prospa reviews are negative.
Analysis of Client Reviews:
We have found a staggering number of Prospa Financial reviews online – over 7000. This is a rarity in the lending space. What’s even more rare is that virtually every single Prospa review reports that Prospa provides an excellent lending experience (as of May 2021 Prospa Australia has had one negative review in the last year and Prospa NZ is yet to have a negative review full stop). It appears that even if Prospa interest rates aren’t the lowest in the business, people are happy to pay them for the great service they receive.
As well as the quick application and efficient processing times, what stands out most is the customer service. In virtually all reviews clients specifically mention their account manager or customer service representative, highlighting what an incredible job they’ve done. Prospa takes the time to respond to each review too – further highlighting how the customer really is at the heart of everything they do.
Client Reviews Score: ⭐⭐⭐⭐
Prospa.com Website Review:
Prospa boasts one of the nicest websites in the business lending industry. The site is clear, straightforward, attractive, mobile friendly, and so too is the application process. They even include a ‘How to Prospa’ section providing a whole host of non lending related advice for small businesses such as tax, marketing and recruitment. All in all, you don’t have to fill in excessive amounts of details to sign up and make your application either, unlike some other lenders.
They even include a ‘How to Prospa’ section providing a whole host of non lending related advice for small businesses such as tax, marketing and recruitment. The advice is always relevant and responsive to major events, recent posts have shared tips for how SMEs can manage the end to their jobkeeper payments which concluded in Q1 2021.
The FAQ’s are really nice, the About Us page is complete, and there are a number of customer success stories for prospective borrowers to view and gain a better understanding of the borrowing process. Prospective borrowers can also access Prospa’s online business loan calculator to get an indication of costs (or try our own business loan repayment calculator).
All in all, borrowers don’t have to fill in excessive amounts of details to sign up and make an application either, unlike some other lenders. Prospa’s website is simple, informative and applying for a business loan is easy. This is all we would expect of the no.1 ranked online lender.
Website Score: ⭐⭐⭐⭐
Prospa Loan Compatibility
- Startup: Prospa prefers to work with companies who have been in business for at least 6 months and have a consistent cash flow established.
- Bad credit: Not accepting, only established businesses.
- Sole trader: Yes, Prospa can fund sole traders.
- Established business: Yes, Prospa will accept any established business.
Compatibility Score: ⭐⭐⭐⭐
Prospa Rates & Pricing
Interest Rate / Factor Rate
Prospa uses a risk-based pricing model to determine the interest rate for each individual customer based on a number of different factors. Such as the industry a business operates, the years that a business has been trading and the current and expected cash flow. Given that banks have a very specific qualification criteria that lots of small businesses will not meet, these businesses can pay higher fees with an online lender than they do with a bank, often because a bank wouldn’t have helped them in the first instance. Applicants can always expect to pay higher fees for shorter-term and unsecured business loans anyway, no matter the provider.
Online lenders can price with either interest rates or a factor rate. Prospa offers its business loans with interest rates. For SMEs borrowing for a term of under a year it’s always worth understanding how rates are relative to a full 12 month borrowing period. Understanding the annual percentage rate (APR) is important to make a comparison between different loans, particularly if some are presented as factor rates and others interest rates.
Origination fees (also referred to as establishment fees) typically lie somewhere between 2-3% for Australian business loans. With Prospa charging 3%, it is at the higher end of the online lending market.
Client Reviews on Prospa’s Pricing
With an overwhelming majority of online reviews for Prospa being positive it appears customers are understanding of the cost, believe it to be fair, and relative to the increased flexibility, fast application times and excellent customer service that Prospa offers small businesses.
We’ve been able to find one review that specifically criticises Prospa for charging excessive rates but there are also a number of reviews directly mentioning that they were happy with the rate they agreed with Prospa.
Interest Rate Score: ⭐⭐⭐⭐
Prospa Review Summary
- Credibility - 100%100%
- Client Reviews - 100%100%
- Website - 98%98%
- Compatibility - 90%90%
Prospa is a truly excellent online lender. The entire process, from application to receiving funds, is one of the most streamlined in the industry and the likeliness of approval for a loan is higher than with most other lenders. Customers are looked after by one of the most knowledgeable and respectful customer service teams of any FinTech provider and the terms and conditions of the loan are clear and transparent. This is exactly what we would expect of an industry leader.
Prospa is the king of small business lending in Australia and our #1 ranked company, just beating its veteran competitor Capify and American giant OnDeck to the top spot. With various awards, such as the Finnies Excellence in Lending for 2020, and spotless reputation in the market, there is not much we can say besides mentioning a whopping 97% satisfaction by Prospa user reviews and 99% customer satisfaction in the last 12 months – the highest in the small business loan industry and perhaps in all of Australian FinTech or indeed Australian financial service providers. If customers love Prospa Finance, then we do too..
Popular Solution For:
✓ Retailers & Wholesaling
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