Peer-to-peer businesses have firmly placed themselves on the map. In cities across the globe, Uber is now a widely accepted mode of transport, Airbnb is a seen as a replacement to traditional hotels, and Kickstarter is a viable source of start-up capital for new business ventures. Australia’s own SocietyOne, a peer-to-peer personal lender, powered by Clearmatch , has seen tremendous growth over the last few years. A good metric to understand the global growth in peer to peer finance can be seen in the attendance of the 2017 LendIt USA conference which saw over 5000 attendees, starting with only 300 four years earlier. In the business space, owners appreciate the idea of cutting out the layers of middle-men and are turning away from more traditional financing providers such as banks. Not only is going to a peer-to-peer marketplace for financing more competitive, but it also involves much less bureaucracy, and is therefore quicker and less stressful.
Grapple, a peer-to-peer invoice trading platform, has entered the stage right as the industry is becoming more widely accepted. There is a dire need for small and medium sized businesses to take control of their cashflow, recognise the value in their own working capital and get out from under the weight of long payment terms, which many large customers require. SME’s no longer need to be at the mercy of traditional banks and other business lenders, as Grapple offers a pay-as-you go service with transparent fees, which are much lower than current industry levels. Grapple’s clients love how much freedom invoice discounting gives them. Whereas traditional invoice factoring tends to take control over the business’s accounts receivable, invoice trading on the Grapple platform allows the business owner to trade as many or as few invoices as they wish, leaving them in complete control of their business management. This peer-to-peer financing model for businesses is bound to change the landscape of cashflow finance in Australia.
February 2018 saw the publication of a report by the Australian government, FinTech Australia and the BankDoctor, an SME advocacy group, which found that peer-to-peer lenders are filling an important void. Traditional Australian banks are not attracted to small-business lending in the current economic climate with tighter lending restrictions and the relatively small profits offered by this type of business. Although the peer-to-peer market is efficiently filling this gap, the authors of the report noted issues of transparency when it comes to interest rates, commissions, and repayment flexibility. In response, Australian FinTech lenders have agreed to abide by a code of conduct, increasing transparency and improving the customer experience. Peer-to-peer finance marketplaces are here to stay and that means more control for consumers and a more efficient way to give and receive a service.