Prospa Review for Potential Borrowers
Prospa Review for Potential Borrowers
This review of Prospa Business Loans will help you gain a better understanding of Prospa – the leading online lender in Australia. We look at how Prospa became the Financial Times fastest growing business in Australia in 2018, 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 2022
Website
Logo
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
Trading for at least 6 months
Turnover greater than $5,000 per month
Required
Driving License Number
Your ABN
Your BSB and Account Number
Basic financial statements such as P&L and cashflow*
*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)
The Nitty-gritty
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 5,750 reviews. .
Awards and Recognition
- Winner, FinTech Lender of the Year, MFAA Excellence Awards 2019
- Great Place to Work Australia 2019
- #5 Deloitte Technology Fast 50 Australia 2018
- Winner, FinTech Lender of the Year, MFAA Excellence Awards 2018
- #1 Financial Times 1000 High Growth Company, Asia Pacific, 2018
- No.1 spot on the Financial Times high growth companies in APAC for 2018
Minimal Interest Rates
- Origination Fee of 3%
- Small Business Loan 9.9% – 26.5%
- Line of Credit 14.95% – 29.95%
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?
Taken from Prospa’s Website, Oct 2019
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 you apply.
Prospa has a 97% approval rating, and has been recognized with countless awards – including 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.
Prospa is committed to improving the way small business owners experience finance. As Australia’s #1 online lender Prospa has now funded more than $1.2 billion to over 20,000 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 continued to work to simplify how their 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.
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 of 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.
2019 IPO
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 will be used to fund the equity portion on Prospa’s high growth loan book but they do also plan new product development and geographical expansion so watch this space.
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 – $100k. The business loan will provide one lump sum for you 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 clearly detail all of their fees at the onset of the loan. Rather uniquely, not only is there no early repayment fee, but if you repay your loan early, Prospa will provide you with a discount on the remaining interest which is payable on your loan. The level of discount will depend on how far you are into your loan, but providing you’re not in default, will be at least 25% of the remaining interest payable on your 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 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).
After reading through this Prospa review, we recommend giving Prospa a try by clicking on the button below.
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 you can find the statistics aggregated from across the internet:
- TrustPilot Australia: 5783 Reviews, 94% Excellent, 5% Great, – 4.9/5Total Score (Excellent)
- TrustPilot New Zealand: 322 Reviews, 96% Excellent, 4% Great – 4.9/5 Total Score (Excellent)
The Feedback:
There are many Prospa reviews to be found online with over 99% of them positive. Customers praise various aspects of the process:
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. Given the current times, it’s remarkable that only a handful of the 5783 Prospa reviews are negative.
Analysis of Client Reviews:
We have found a staggering number of Prospa Financial reviews online – over 5750. This is a rarity in the lending space. What’s even more rare is all of these reviews report that Prospa provides an excellent lending experience. Even if Prospa interest rates aren’t the lowest in the business people are happy to pay them to get a great service.
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.
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.
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. You can access Prospa’s online business loan calculator to get an indication of costs(or you can try our own business loan repayment calculator).
Prospa’s website is simple, informative and applying for a business loan is easy. This is all you would expect of the no.1 ranked online lender.
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.
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 your business operates, the years you have been in business and your 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 you in the first instance. You 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. If you’re borrowing for under a year it’s always worth understanding how your rates are relative to a full 12 month borrowing period.
Origination Fee
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.
Prospa Review Summary
Name: Prospa
Summary
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 your business operates, the years you have been in business and your current and expected cash flow. Given that banks have a very specific qualification criterion 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 you in the first instance. You 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. If you’re borrowing for under a year it’s always worth understanding how your rates are relative to a full 12 month borrowing period.
Origination Fee
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.
Overall
-
Credibility - 100%
100%
-
Client Reviews - 100%
100%
-
Website - 98%
98%
-
Compatibility - 97%
97%
Pros
- Smart Matching by LendScore™
- Instant Responses to Application
- Fully Online System
- High Variety of Lenders (34)
- Bank-Level Encryption
- 4.8/5 Score on TrustPilot
- Member of the FBAA, CAFPA, and MFAA
- Tech Platform of the Year Awards 2020
Cons
- Not a Lender
- Doesn’t Operate During Weekends
- No Call Centre, All Online