Amex launches new small business loan product

In a first for American Express outside of the United States, the company is announcing the international expansion of its existing business financing product suite with the launch of Business Loans in Australia. American Express Business Loans will offer unsecured capital of between $5,000 and $250,000 to small and medium enterprise (SMEs) customers in Australia. The move comes as Australia’s SMEs are estimated to seek more than $130 billion^* of additional capital through business loans to fund their recovery and growth following an unprecedented period for the sector.

 

American Express has partnered with global originations platform, ODX, to introduce these loans, harnessing the capabilities of its world-class digital platform and existing footprint in Australia to ensure a seamless online application and approvals process. The loans will initially be offered to a select group of American Express business card members, with more customers invited to apply within the first half of this year. 

 

American Express’ move comes amid a new American Express SME Recovery Survey conducted to better understand the current environment for business owners and uncover how they are reacting as business conditions shift in 2021.

 

The research shows that the majority of Australian SMEs (53 per cent) are optimistic about the year ahead. This is despite the ongoing pandemic and the expected end of JobKeeper in March, which according to 55 per cent of respondents, helped or was vital in keeping their business afloat in the midst of the health crisis.  

 

SMEs’ feelings of optimism however, are tempered by the knowledge that more than two in five businesses will need to access additional capital in the form of a loan this year – one in four (26 per cent) say as a direct result of JobKeeper ending. On average, those seeking a loan intend to request just under AU$100,000 ($97,225). 

 

According to Martin Seward, Vice President of Global Commercial Services for American Express Australia, “Many businesses are still feeling the full impact of the Covid-19 crisis, while others have rebounded with their sights firmly set on growth. We have taken a transformational step to evolve our business beyond our existing card offering to help support businesses on their journey forward.”

 

The American Express research reveals that the top business resolution for nearly two in five SME operators this year is to try new ways to grow their business. Of that group, more than a quarter believe this growth could be significantly greater with the appropriate amount of capital.

 

And yet, nearly half of SMEs who sought funds from other lenders during the pandemic said they faced challenges - from finding the process complex to being asked to use personal assets as security.

 

“We don’t believe SME’s growth should be stymied by red tape or unneeded complexity, and certainly not at the expense of having to put your house or business on the line – something that extraordinarily a third (32 per cent) of SMEs needed to do to raise capital during the pandemic.

 

Our unsecured business loans remove some of the existing complexity that comes with many other loans on the market, with funds deposited into a customer’s account typically within two business days of approval,” concluded Seward.

 

“We are thrilled to be partnering with American Express in their efforts to help businesses recover and grow,” added Brian Geary, President of ODX. “Given the dramatic shift in customer needs and preferences during the pandemic, it’s more important than ever to provide them with a digital and frictionless experience to tap into financing. We are proud to work alongside such an iconic brand in the pursuit of making working capital readily available to businesses in Australia to fuel the recovery.” 

 

About the American Express Business Loans

• Unsecured funding from $5,000 to $250,000
• Annual interest rates from 10.95% p.a.
• Terms of 6,12,18 or 24 months
• Quick and simple online application process
• No set-up or early repayment fees. A $30 fee for a missed payment
• Fast decisioning with funds usually delivered within two business days of approval
• Loan approval is subject to American Express eligibility criteria

 

Interesting facts.

 

1.      Of those SMEs that attempted to gain capital for their business from other lenders during the pandemic, top challenges they faced were:

1.      Finding the process complex and lengthy

2.      Needing to approach a number of lenders before they were successful

3.      Not receiving the entire amount of funds requested

 

2.       Top 5 reasons for accessing capital in 2021:

1.    To grow/expand their business

2.    Buying equipment

3.    To ensure their business’s survival

4.    Marketing and advertising

5.    To cover essential operational costs

 

3. Of those SMEs intending to access capital this year in the form of a loan nearly half (45%) say they will look outside of the traditional Big 4 banks.