Xero speeds up Loan Approvals for Small Business

Xero speeds up Loan Approvals for Small Business

We’re always looking out for ways to make life easier for our clients. So we were very interested to see that Xero recently partnered with the National Australia Bank to speed up business loan approvals.

How does it work?

According to the Sydney Morning Herald, NAB uses a secure connection to link to a potential borrower’s Xero accounting data. This allows a borrower who operates Xero Accounting Software to file a loan inquiry online.

Xero Australia Managing Director Chris Ridd reportedly told Fairfax Media that:

"Clearly, the richness of data in Xero that the customer is able to authorise the bank to access means a more complete picture of the customer's financial health can be achieved, and this will tend to speed up any loan approval process.”

What does this mean?

An influx of online lending companies has meant many of the big banks and larger lenders are struggling to compete for small-business loans.

NAB and Xero’s partnership provides small business owners in Australia with greater access to online lending solutions, and opens the door for other major banks to consider similar strategies.

Reports indicate that CGU Insurance is already in talks with Xero about sharing payroll data to more effectively assess premiums for workers’ compensation.

Does Xero get anything out of this?

Xero and NAB go way back. NAB was one of Xero’s first equity investors when the company first listed in New Zealand 8 years ago. But the short answer is yes.

Xero does receive a small commission for referrals they generate.

Need a small business loan?

Although we certainly love any innovation that streamlines the loan approval process for small business owners, we also caution against applying to a single bank for a loan – whether its online or in person.

Borrowers have never been in a better position to negotiate more competitive business loan rates from lenders, so consider comparing multiple loans before making a choice.

A mortgage broker can help you do this effectively.

For more on Capita’s business loan service, please contact us.