As small and medium enterprises navigate through various challenges in their growth cycles, it is essential for banks to continue providing them with simplified and innovative lending solutions to help them with their immediate needs.
One innovative lending product that has been instrumental in providing businesses with capital injection to help them grow has been the FNB booster loan.
Since launching the booster loan in August 2018, FNB has disbursed more than R43 million to over 700 businesses. The Bank has further converted booster loans to:
- 32 loans with limits of R6 million,
- 95 overdrafts with limits of R17 million, and
- 49 credit cards with limits of R1.3 million.
Daniel Kaan, FNB Business Transact Pillar CEO says, we designed this product to solve for the specific challenge of applying for credit early in the business life cycle. Before this product, automated scored credit offerings to businesses that had not been operating for longer than 12 months did not exist.
“A booster loan can be requested from as early as six months after opening a business account with FNB. No security or audited financials are required if the loan is approved, with the only requirement being that the business owner provides personal surety. As a result, this loan has been increasingly taken up by SMEs who would never have qualified before,” adds Kaan.
The loan amount offered ranges between R10 000 and R100 000 and the repayment is a fixed amount, payable over six months.
“In order to help SMEs to grow, lending products should be conveniently accessible to them through any channel of their choice. As result, we continue to leverage our banking platform to make this possible. Many of our customers are now using the FNB App to get access to an overdraft, business loan and revolving loan,” says Kaan.
The entire process is digitised allowing SMEs to access loans within a few minutes, without speaking to a bank representative. The Bank has tailored lending solutions suitable for all SMEs throughout their development journey – as they start, run and grow their businesses.
Kaan says innovation has been instrumental in improving financial access to small businesses. This continues to be facilitated on the back of simplified, scored digital lending processes. Our loan review and approval processes have also been simplified making it easier to review our customers’ risk profile, financial, sector and business information as well how much they can qualify for.
“We will continue working around the clock to identify effective and efficient models to simplify lending processes for SMEs. This includes taking a different approach in reviewing risk criteria, while considering the unique needs and circumstances of our business customers.