Please tell us about the nature of your business?
We advise businesses and lenders at various points in the lifecycle of their business, usually around a significant event. For example, when considering a growth opportunity or next step, a customer changing terms or a key employee leaving the business. We give advice to the business owners, the advisors and also the lenders to ensure any exposure or risk is examined and planned for.
What are the biggest issues your clients are facing in the current climate?
We are seeing a lot more competition in the business lending space with competition defined by actual lending capacity as well as lending criteria. Despite the increase in competition, finance is more difficult to obtain with significant tightening across the sector due to the Banking Royal Commission and stricter covenants attached to wholesale, retail and mezzanine lenders.
Rates are still high compared to that of personal lending (but this is to be expected as business risk has to be considered). In fact, the current situation is similar to what we were experiencing pre and post GFC.
How has this changed in the last two years?
The Banking Royal Commission while primarily targeting wrongdoing in the consumer space, has had wide reaching impact across the sector with stricter lending practices resulting.
How do you see this changing in the next two years?
In the next two years I see first and second tier non-bank lenders experiencing significant growth both in capital capacity and market share. I would expect them to take a chunk of the market from primary bank lenders. I would anticipate (to begin with) the banks may be quite happy to let this happen as they are currently very risk averse however, after a year or two we may see them become more aggressive and claw back some of this higher risk segment.
What problems has Apricity solved for your clients?
Apricity has the ability to provide a platform for clients to borrow against their debtor book and not tie them up in fees and contracts. This is a very positive model for clients who need to remain agile and have flexibility through business events like those I mentioned earlier. Apricity has confidence in the book, as opposed to the collateral and the business has access to their own funds sooner without taking on debt.
What do you like most about Apricity?
Apricity believes in their model, they stay true to it and maintain its integrity. For me integrity in any form of lending is of the utmost importance.
The other defining factor about Apricity is that they understand small business, medium business and the construct of the SME space as a whole. The team and business leaders all have real experience running SME businesses themselves and understand the needs and motivations of their clients.
Adam Lysle, Veritas