Back to Business loans: Prospa offers a way out of crisis

road to small business future beyond 2020

2020 has been a tough year for many Aussie businesses. Three months since COVID-19 was first declared a pandemic, 47% were still reporting falls in revenue, according to Australian Bureau of Statistics (ABS) data released last month. 

But as parts of Australia begin to reopen and navigate a COVID-safe environment, the next big question is this: how can small businesses ensure cashflow issues don’t stop them from bouncing back with full force? 

For some, the answer may be the government’s Coronavirus SME Loan Guarantee Scheme. Under the first phase of this scheme, set to end 30 September 2020, the government is guaranteeing half of all three-year unsecured business loans of up to $250,000 issued by participating lenders. 

Under the second phase, running between 1 October 2020 and 30 June 2021, small to medium-sized enterprises (SMEs) can access even larger loans of up to $1 million and repay them over a longer period of five years. 

Prospa is one of the scheme’s 41 participants, alongside other non-bank lenders including GetCapital, OnDeck Capital and Spotcap. And it’s catering for the scheme and the tough climate businesses face right now with two new products: the Back to Business loan and the Back to Business Line of Credit. (Note: from 30 September onwards, these products are no longer be available.)

With both products, approved businesses can receive funds of up to $250,000 in as short as 24 hours, and they also won’t need to worry about making any loan repayments for six months. 

Prospa’s co-founder and chief revenue officer, Beau Bertoli says the focus of Back to Business is to help small businesses not just survive, but thrive for the rest of 2020. 

“Of course there are a lot of viable businesses across the country who were hit hard by restrictions and now need cash flow support, but many are now starting to get back to business and plan for the future,” he says. 

“Our funding has helped these small businesses make upgrades to meet new sanitation requirements, revamp their websites and introduce online services, and even launch digital marketing campaigns.”

“There are also businesses in essential services or particular sectors experiencing demand who want to seize growth opportunities while they can,” he adds.  

“For example, with more Australians gardening and renovating, we’ve had fertiliser and tiling businesses with months of work lined up come to us for funds for extra stock and supplies.”

Business loan vs line of credit: what’s the difference?

The short answer is: they suit different funding needs. So one option might be preferred over the other, depending on your business situation. 

For instance, the Back to Business Loan is a lump sum of $250,000 paid upfront, so it works well for one-off purchases such as bulk stock, renovations and new equipment. 

Meanwhile, the Back to Business Line of Credit is a facility that gives businesses ongoing access to funds of up to $250,000, which means it’s a better fit if what you’re looking for is a “cashflow safety net”. 

Bertoli explains that with a line of credit, “businesses can dip in when they need to and only pay interest on the funds they use, helping them manage the uncertainty around COVID restrictions and respond quickly to changing circumstances.” 

Interested in seeing how Prospa stack up against other lenders in the market? Scroll down below for a snapshot of unsecured business loans and lines of credit on offer.

Compare unsecured business loans - rates updated daily

Search promoted business loans below or do a full Mozo database search. Advertiser disclosure.

Refine the list of business loans

Let’s help find you a great business loan...
  • Unsecured Business Loan

    A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.

    Interest Rate
    Upfront Fee
    Funding Speed
    from 9%
    -
    Within same day
    Details
  • Invoice Finance

    Increase cashflow by unlocking the power of your receivables with Octet’s Invoice Finance solution. Receive up to 85% of your debtor’s ledger with tailored facilities ranging from $100K to $12M.

    Interest Rate
    Upfront Fee
    Funding Speed
    0% for the first 60 days, then rates starting from 6%
    On Application
    Instant on approval
    Details
  • Prospa Plus Business Loan

    Prospa uses risk-based pricing to determine your interest rate. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.

    Interest Rate
    Upfront Fee
    Funding Speed
    Interest rates vary based on risk.
    3.5%
    from 24 hours
    Details

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.