Digital-first Avenue Bank gets licence to offer short-term finance to small businesses

The prudential regulator has given Australian business lender Avenue Bank the green light to offer short-term finance to small businesses.

The Australian Prudential Regulation Authority on Tuesday approved the bank’s licence to offer small businesses short-term finance without all the requirements other banks can impose, such as using property as security for a loan.

Entrepreneurs Colin Porter and Dale Hurley founded Avenue Bank after successfully establishing the credit reporting bureau CreditorWatch in 2009.

The bank is also backed by Sherman Ma’s publicly listed Liberty Financial Group, which emerged about 20 years ago and went on to disrupt the mortgage industry.

George Confos, Avenue Bank chief executive, says the bank aims to disrupt traditional business banking by using technology to solve the pain points of modern business owners.

“We can use digital information available to us and a very smart digital application and credit engine to help customers by offering quick decisions,” Confos tells SmartCompany. 

Avenue Bank is positioning itself as a short-term capital finance provider for small business with annual turnover between $500,000 to $25 million.

The digital-first bank aims to solve the major pain points small businesses face, including access to quality customer service from banks and the ability to manage cashflow.

“It’s all very well to get a loan but you really need a bank that’s going to be there for the day-to-day month-to-month quarter-to-quarter cashflow needs,” Confos says.  

The bank sees opportunity to expand in the unsecured lending market by offering finance to businesses based on the business value rather than the value of a business owner’s property.

“It’s essential for the product to be different,” Confos says.

“So many times we see young people who have operated businesses successfully for five or six years but they don’t have real estate.”