SYDNEY–(BUSINESS WIRE)–The second quarterly Online Small Business Lending Index, released by
the online Business Loan comparison service, MerchantCash.com.au found
cash flow issues and a poor credit history accounted for 49 per cent of
the 53 per cent of small business online loan applications being
rejected. Other reasons for rejection included poor or insufficient
One of the key findings was in increase in the rate of approvals from 41
to 47% for small businesses.
Merchant Cash co-founder James Watson said the reason for this pickup in
approval rates was primarily due to older applicants learning about
online business lending and seeking out information on their options.
These businesses tend to have higher revenues and more trading history
than those owned by younger owners.
“When we first started our online business loan comparison service, the
majority of applicants were under 35, and their businesses tended to
have fairly short trading histories which makes assessing their
serviceability more difficult for lenders.”
Merchant Cash co-founder Jonathan Raymond said another finding of the
study was that many profitable businesses have difficulty proving their
“Some small businesses, especially in trades and retail industries,
transact primarily in cash and if this money never enters a bank
account, it cannot be verified and can lead to a healthy business being
rejected for a loan,” he said.
The study was conducted on a sample of 1000 applicants over the quarter
ending 30 June 2016. With the rapid growth of online small business
lending in Australia, this index will shine a light on approval rates
for business loans.
Mr Watson said one of the motivations in establishing Merchant Cash was
to provide the two million Australian small businesses with an easier
way for comparing all the Business Loan options that exist online.