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Neu.Capital raises the stakes in SME marketplace lending

18 March 2016 4:46PM
An online marketplace lender that aims to connect small and medium sized businesses with sophisticated and institutional investors is launching next month.  Neu.Capital, a product of both the major new Sydney hubs, Stone & Chalk and Tyro, has claimed in a media release to be the first platform to allow SMEs to access serious additional funding, and to do that through a simple web-based interface. "There are more than 30 platforms globally for companies to raise small amounts of capital (A$1,000 to around $1 million), but Neu.Capital is the only one that serves the mid-market $5 million to $100 million space," the fintech claimed. On its website, Neu.Capital says minimum deal size for funding offers will be $5 million, with lenders and borrowers initially matched though anonymised data, before moving into virtual dealroom mode, where confidential numbers are revealed. The fintech said funding for SMEs will be provided by family offices, private equity, credit funds, second tier banks, corporate funds and high net worth individuals.  "These investors control more than $20 billion in funds, and will benefit by having instant access (at no cost) to a host of deal-ready companies from their mobile or desktop," Neu.Capital said. The platform then allows these cashed up investors to "bid" for an anonymised SME's business, typically by offering either a debt, equity or "hybrid" deal to meet a specific funding target. The move, if it goes ahead as planned, will add volume and diversity to what a KPMG-sponsored alternative finance benchmarking report highlighted as an already crowded space - large investors using marketplace lending to access Australian businesses, rather than the peer-to-peer retail banking style consumer loans that account for the majority of activity in most other markets.

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