The accounting software vendor has partnered with an Australian fintech startup to provide loans for small businesses.
Reckon has become the latest cloud accounting software provider to enter the small business lending market, after forging a partnership with Sydney-based fintech startup Prospa.
The service allows businesses to apply for an unsecured between $5,000 and $250,000, with loan terms ranging from three to 12 months with daily and weekly payment options available.
After filling out an online application form, Prospa assesses the creditworthiness of a business using its proprietary technology platform, with funds generally available for successful applicants on the next business day.
Reckon is looking to integrate the loan application process into a future version of its Reckon One cloud-based accounting system.
According to a loan calculator on its website, the service will charge total repayments of $5808 on a $5000 loan when repaid at a rate of $22 per day over 12 months.
Prospa claims to have funded more than $150 million small businesses loans since its launch in 2011 with a 95 percent customer satisfaction score.
In September of last year, the fintech startup raised a $60 million funding round led by private equity giant the Carlyle Group, which also included Ironbridge Capital, Entrée Capital, Airtree Ventures and high-profile private investor David Fite.
In a statement, Reckon Group chief operating officer Dan Rabie said business data from within the accounting package would be used as part of the credit approvals process.
“Fintech disruption has changed the business lending game, with online entrants challenging the traditional providers of bank finance by introducing new cash-flow financing options for SMEs,” Reckon Group chief operating officer Dan Rabie said.
“Data from accounting software used to evaluate cash-flow is seen as the best measure of business fundamentals, helping to determine the business’s ability to repay and manage risk during the life of a loan.”
The loans venture is the second move by Reckon into the business financial services space in less than a week, with the accounting software firm striking up a partnership with PayPal for invoice payments.