Disrupting the SME Lending Market

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1 Disrupting the SME Lending Market Aris Allegos CEO & Co-founder, Moula Small Business Lending During 2015, $14.3 and $41.8 billion of new credit was approved with loan principal less than $100,000 and $500,000, respectively. Funding the growth of a SME s business is a challenging and lengthy process which has been dependent on manual underwriting BUSINESS LENDING, 2015 Requirements for collateral to be held against SME loans can result in, allocative inefficiencies where loans are made to businesses with the best collateral, rather than those that are the best business prospects. Reserve Bank of Australia 1. Financial System Inquiry Interim Report, July Reserve Bank of Australia, Bank Lending to Business New Credit Approvals by Size and by Purpose D7.4, Mar

2 Less Predictive More Predictive 28/11/2016 Small Business Lending More than 1.5 million SMEs access business lending, with a large proportion relying of borrowing less than $100,000 Both Australia and New Zealand lead the world with the adoption of cloud accounting, exceeding 40% penetration The growth in cloud based accounting solutions has enabled Moula to develop an innovative and unique underwriting model Discussion Sources Accounting Data Transaction Data Bureau Data Business Data Other (e.g. Social) Best measure of serviceability, indebtedness and assurance Secondary measure of serviceability, limited relevance to indebtedness Limited relevance to business risk and poor gauge of creditworthiness Risk assessment based on firm size, age, industry, geography, etc Limited relevance, however, used holistically can be a measure of risk Source: HBS Working Paper Series, The State of Small Business Lending: Credit Access During the Recovery and How Technology May Change the Game, Jul

3 Our Background Founded July 2013 Strategic Partners Headquarters Melbourne, Australia Technology Proprietary, wholly owned and developed Funding Institutional VALUES Innovative Proprietary platform, built to accommodate accounting data sources Responsible Driven by ethical lending standards: transparent pricing with no hidden fees Experienced Founding team with extensive expertise in banking, accounting and technology 3

4 Application Process STEP ONE STEP TWO STEP THREE Business & Personal Information Link Your Data Tell Us Where to Deposit The Funds Moula will push journal entries to the general ledger, accounting for the life of the loan Products Product Term Loan (Unsecured) Line of Credit (Unsecured) Size $5,000 - $250,000 $5,000 - $250,000 Term 6 18 months 6 12 months Pricing (Per Fortnight) 0.75% % 0.75% % Payment Fortnightly Fortnightly Availability Repeat at ~50% amortised Draw on-demand Minimum Lending Criteria 12 Months The business must have been in operation for 12 months (and have been operated by the applicant) $5,000 Per Month The business must demonstrate average monthly revenue of over $5,000 ($60,000 per annum) Fair or better The business, and the individual director, must have a fair or better credit history 4

5 Design Intuitive design for easy-of-use Detailed customer dashboard Partner portal for loan referral Ongoing customer management Our Customers I just went online and applied they had a really simple three step process. About ten minutes after I made the application, I got a phone call from them saying the loan was approved Laurel Get Digital Flow I spoke to our accountant and she introduced me to Moula they assisted me and within 24 hours we had a cash injection. It s good to know that when we get a good business opportunity, we can get support. Stephen Scotty s Wholesale Meats 5

6 Our Partners My client had some cash flow issues given their obligation to pay employees prior to receiving payments from their debtors. I initially called Moula, and subsequently signed up to the Partner Program and was able to refer my client in a matter of minutes. The team at Moula took it from there Kerry Hargreaves The Book Balancer Register Get started by registering online as a partner Refer Refer clients and track the process of their loan online Reward Earn a commission on all funded loans referred Get in touch partners@moula.com.au moula.com.au/partners 6

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