Prospa Review

Our review of Prospa

Prospa is an Australian small-business lender offering small business loans and a business line of credit. They provide business loans between $5,000 and $300,000 and are favoured by small businesses due to their simple application process. Online loan applications can often be completed within 10 minutes, and approved within 24 hours. 

Prospa has an extensive track record in lending to small businesses. Since 2011, the company has funded over $1.35 billion worth of business finance to more than 24,000 businesses, winning numerous awards in the process.

Prospa Business Loans overview

Prospa loans range between $5,000 and $300,000 for a Small Business Loan and between $2,000 and $100,000 for a Business Line of Credit. Both types of finance can be used for any genuine business purpose, such as:

• Tax payments 
• Renovations 
• Equipment hire 
• Marketing campaigns 
• Managing cash flow 
• Paying invoices 
  

You can apply for a loan with Prospa online:

• Applications take 10 minutes to complete 
• Approval is given within 24 hours
• You will need to supply business financials if applying for a Small Business Loan amount greater than $150,000
  

Prospa is transparent about how it applies rates, fees and penalties to its business finance:

• Small Business Loan interest rates range between 9.90% and 26.5% 
• Small Business Loan applications incur a 3% origination fee 
• No penalties for early repayment on Small Business Loans 
  

• Line of Credit interest rates are calculated daily on the overdrawn balance
  
• Line of Credit includes a one-off line activation fee of $195 and monthly fees of $25
  
• $25 dishonour fee for missed payments on a Line of Credit balance 
• Line of Credit late payment fees are calculated on the outstanding balance
  

Repayments are made either daily or weekly for small business loans, and by weekly automatic payments on a business line of credit.

Learn more about Small Business Loans in Australia, or see how the low minimum term for Prospa small business loans makes them suitable for borrowers seeking short-term business loans.

How to apply for a Prospa Small Business Loan

You can apply for Prospa small business loan online or over the phone. Loan applications can be approved within 24 hours, and if an application is lodged before 4 p.m. it can be possible to have funds released the next business day.

When applying for Small Business Loans with Prospa for less than $150,000, you will need:

• An acceptable form of ID (Driver Licence, Passport) 
• Your ABN 
• Your Business Bank Statements (six months) 
• Your Bank State Branch (BSB) and account number 
  

For loans between $150,000 and $300,000, you'll also need to provide business financials, including profit and loss statements. Prospa requires security on Small Business Loans greater than $100,000.

How much does a Prospa Small Business Loan cost?

The cost of a Prospa Small Business Loan will include:

• The principal amount - between $5,000 and $300,000 
• Interest applied to the principal - simple interest between 9.9% and 26.5% 
• An origination fee of 3% 
  

There are no penalties for early repayment or additional hidden fees, and loan repayments can be made daily or weekly to suit the company's cash flow over a term of three to 24 months.

Prospa Small Business Loan Cost Example:

• A business applies for a small business loan on a 12-month term 
• Prospa approves a small business loan amount of $100,000 
• An origination fee of 3% ($3,000) is added to the total loan amount 
• A simple interest rate of 15.9% is applied to the loan principal
  
  
  
• The total amount to repay is $103,000 plus interest over 12 months 
• The business agrees to weekly payments of $2,295.71 
• The total amount paid over the term is $119,376.92 
• Interest paid over the term is $16,376.92

Want to compare business loan repayments? You can use our free business loan calculator.

Learn more about a Business Line of Credit.

How much does a Prospa Business Line of Credit cost?

The cost of a line of credit will be relative to how much of the available balance you use, and how quickly you repay the drawn amount:

• A line activation fee of $195 is incurred on the first drawdown 
• A monthly fee of $25 is charged after the first drawdown 
• Interest rates start at 14.95% 
• Interest is calculated daily on the drawn amount and charged weekly 
• Repayments will cover the interest accrued 
• Repayments will cover a percentage of the principal amount (1%) 
• Additional principal repayments can be made at any time
  

Weekly repayments are automatically deducted from your nominated business bank account. In the event the automatic payment is declined, you may be charged a $25 dishonour fee, and a late payment fee based on the drawn balance at the time of the declined payment. 

Prospa Business Line of Credit Example:

• Prospa approves a $50,000 business line of credit 
• The business draws down $20,000 
• Prospa charges the business a one-time $195 activation fee 
• Interest is charged on the $20,000 drawn amount not the full $50,000 amount 
• The business makes automatic payments to cover the interest amount, which includes a 1% principal payment of $200 
• The business also chooses to make an additional full repayment to clear the drawn amount 
• The business is charged a $25 monthly fee to keep the line of credit active 
• No interest is accrued until an amount is drawn down again
  

How to apply for a Prospa Business Line of Credit

Applying for a Prospa Business Line of Credit is a similar process as applying for a small business loan. Applications take around 10 minutes to complete online, and funding is often made available within 24 hours.

When applying for Line of Credit between $2,000 and $100,000 with Prospa, you will need:

• An acceptable form of ID (Driver Licence, Passport) 
• Your ABN 
• Your Business Bank Statements (six months) 
• Your Bank State Branch (BSB) and account number 
  

Prospa offers a revolving line of credit on a 12-month term. To extend your line of credit beyond 12 months, Prospa will reassess your business financials when you apply for an extension. As with the initial application, this can be conducted online or over the phone. 

Note: You are not required to provide collateral on a revolving line of credit with Prospa.

Money.com.au Prospa Summary

Prospa loans are designed for small businesses, and their application process is tailored to the needs of small-business borrowers. They offer fast access to finance through a simple online application process, require minimal paperwork, and an automated approval process which allows funding to be approved within 24 hours. 

In 2019, Prospa made a number of changes to its small business lending platform:

• It added the Business Line of Credit product 
• It increased the maximum Small Business Loan amount to $300,000 
• It increased the maximum Small Business Loan term to 24 months
  

Their finance products can be used for almost any business purpose, which enables business owners to access cash flow and be unrestricted in how they choose to use the funds. The addition of a Business Line of Credit product now means business owners can also use Prospa to access variable amounts of cash if and when they are needed. 

Prospa doesn't require any collateral on a Business Line of Credit, or Small Business Loans up to $100,000. This ensures business owners unable to meet to the loan security criteria of other lenders have the same access to finance for their business as those with existing collateral. 

Borrowers can create a profile online with Prospa, and use the Prospa Mobile App to allow for secure, 24/7 access to their account. The app includes:

• Details on account status, outstanding balance, and any available funds 
• Ability to draw down a line of credit or pay 
• Calculate and make repayments, and view details of any charges 
• Transaction and account history 
• Notifications for upcoming or declined payments 
  

Prospa was founded in 2011 and has grown to be one of the most popular small-business lenders in Australia. Prospa was listed on the Australian Securities Exchange (ASX) in June 2019, and has won numerous awards since the company was founded:

• 2015 - Winner at Australian Deloitte Technology Fast 50 
• 2016 - #1 Smart Company in Australia at Smart50 
• 2017 - Lending Innovated of the Year award at FinTech Business Awards 
• 2018 - #1 high-growth company in the Asia-Pacific region on the Financial Times' list of 1,000 high-growth companies 
• 2019 - Winner of Deloitte Technology Fast 500 APAC 2019 
• 2020 - Listed on Mortgage Global 100 list 2020
  

Prospa believes in providing access to growth opportunities for businesses needed fast access to finance, and has approved more than $1.35 billion in finance for over 24,000 Australian small businesses since 2011.