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Prospa Business Loans Review

We review Prospa, the online business lender committed to providing fast loans, fixed fees and simple to understand terms. Our review explains the fees, pros and cons and everything you need to know to help decide if Prospa is right for you

Updated 3 April 2023
Summary of Prospa
  • Prospa is a dedicated business loan lender, operating online and over the phone only. 
  • Prospa offers two types of loans - a Small Business Loan and a Prospa Plus Business Loan.
  • Small Business Loan: $5,000 and $100,000 loans for covering working capital and everyday expenses.
  • Prospa Plus Business Loan: $100,000 to $500,000 loans to invest in business growth opportunities.
  • Fees: 3.50% is charged on the balance of your loan if you proceed. For example, if your loan was $30,000, the fee would be $750. There are also early repayment fees and default fees.
  • Personal Guarantee (Important): For loans up to $150,000, no asset security is required upfront to access the money. However, for every loan, Prospa requires a personal guarantee.
  • Security: For loans of over $150,000 Prospa generally takes a personal guarantee and security in the form of a charge over assets.
  • Decision Process: All funding decisions are achieved by assessing your business's data points, including turnover, profit and loss, business tenure, size and industry sector. The data Prospa analyses determines the interest rate you'll be offered. Prospa focuses on bank account transaction data to help reach its decision to whether you'll be approved and what the interest rate will be.
  • Prosa is an Australian company, listed on the ASX, and launched in New Zealand in August 2018. It offers an alternative business loans channel to traditional lenders.
  • Unlike banks and traditional lenders, Prospa offers decisions within 24 hours, although it claims you can hear back within one hour of applications providing you allow your bank information to be verified online. Loans up to $150,000 don't require security.
  • Prospa, despite being innovative, has attracted some negative media and regulator coverage in Australia. An ASIC report published in 2018 confirmed Prospa would roll back unfair loan terms. This 2018 story from the Australian Financial Review talks about how Prospa's focus at the time was big on fees and loan extensions.
  • Prospa's customer support includes phone, email and online chat.
  • Before proceeding with any business loan, always make sure you understand the fees, interest rate, penalties and repayment terms. A business loan, even if unsecured, can become onerous and destroy your margins if you struggle with repayments. Our guide to business loans as more details.

Advertising Disclosure: MoneyHub may receive a payment if you make a purchase on our website. Such commercial arrangements have no influence on our independent reviews of financial products. Please refer to our advertising policy for more details.

Our video below summarises the key facts and must-knows of Prospa:
Our Guide to Prospa
  • In this guide, we analyse Prospa, an increasingly small and medium-sized business lender.
  • ​Borrowers are attracted by unsecured lending terms, transparent upfront fees (3.50% of the loan amount), competitive interest rates and quick decision making during the applications.
  • The application process is fast, with approval decisions within 24 hours. 

In this guide, we look at what Prospa offers small and medium-sized businesses. We cover:
Compare Prospa: If you're looking to compare Prospa with other business lenders, our business loans guide has you covered. Our video summary below further explains what you need to know:
MoneyHub's Top 4 Business Loans - Avoid high-interest rates and high fees with our top four trusted business lenders.
  • Our research highlighted four leading business lenders that undercut the established competition with fairer interest rates and fees to qualifying business borrowers and a genuine willingness to lend.
  • We suggest contacting Prospa, Bizcap, Lending Crowd and Harmoney (in that order) to see what interest rate they will offer.
  • Applying takes only a few minutes for each site. There is no obligation to accept any loan offer. However, be aware that the advertised interest rate is not guaranteed, and your credit score may, in some cases, be affected if you routinely apply for loans.
  • The more you compare and enquire (without paying any application fee), the better your chances of finding the best deal.
  • Remember, the interest rate you agree to now makes a huge difference when you repay the loan week after week.
  • Advertising Disclosure: We may receive a commission if you take out a loan, but this does not influence our shortlist or comparisons. Interest rates vary based on each borrower, and assessment times vary.
Our Top Business Loans Providers:

Prospa - Understanding who qualifies for a loan

Our review covers the Prospa Small Business Loan rather than the Plus Business Loan.

You can apply for a Small Business Loan with Prospa if you;
  • Are a New Zealand Citizen (or Permanent Resident)
  • Are over 18 years, own a New Zealand business (with a valid NZBN/IRD)
  • Can demonstrate at least 6 months of trading

What can a Prospa Small Business Loan be used for?
You can use the money for almost any business purpose, including cash flow management, business renovations, marketing, to purchase inventory or new equipment, as general working capital etc. Prospa is clear that the loan can't be used for personal purposes.

If I apply for a loan, how loan does the approval decision take?
Prospa claims that they can often provide a response in one hour, as long as you apply during standard business hours and allow us to use the advanced bank verification system link to instantly verify your bank information online. If your banking details are uploaded using statements, the decision can take 24 hours.

How long does it take to get the money?
Akin to its focus on fast decisions, Prospa claims that if a loan is approved before 4pm on a business day, you'll be able to access it the following business day.

Compare Prospa: If you're looking to compare Prospa with other business lenders, our business loans guide has you covered.

​Benefits of Prospa's Business Loan Process

Unlike traditional business banking lenders, Prospa has some unique features:
  1. Fast application process and decision making: Prospa claims your application should take five to ten minutes from start to submission. This is very different to a bank which will require an appointment.
  2. Working capital and strategic loans: Prospa offers loans from $5,000 to $300,000, depending on your business needs. 
  3. Flexible repayments: Prospa sets up direct debit repayments which can be daily or weekly and match your business cash flow activity.

But, be aware:
  1. Fees can be high if you miss payments or default. This is standard with any business lender but it's essential to be aware of to manage your business cashflow and ensure you don't get squeezed by extra charges.
  2. There is an early repayment fee: If you want to repay your loan, you'll need to contact Prospa. You'll be provided with an early payout figure. This will be calculated as the total of the remaining principal amount and any accrued interest at the date of early payout, plus 1.5% of the remaining principal and any outstanding fees. For example, if you had $20,000 owing, your early repayment fee would be at least $300.
  3. Always compare the offer you receive with other options. Our business loans comparison details 10+ lenders who compete with Prospa. Even though you may be short of time and need a cash infusion into your business now, it's best to only accept a loan when you've done a full comparison.

Have the best chance of loan success

The speed and success of your Prospa loan being approved will depend on how much data you provide and how conclusive you are in your application. For the best success, be sure to:
  1. Be honest when answering all questions
  2. Complete every section - leaving blanks can raise issues
  3. Share bank data - Prospa needs to see your business banking records; having statements available is one option, but also allowing Prospa to access your live banking data speeds up an application.
  4. Insert the most up to date numbers you have for turnover, expenses, profits, losses and other related personal finance questions.

Compare Prospa: If you're looking to compare Prospa with other business lenders, our business loans guide has you covered.

Prospa - Our Conclusion

Prospa is an innovative business lending specialist challenging the banks who, in our view, are reluctant to lend. The primary benefit of Prospa is that decisions are quick and you can obtain a quote before talking to other lenders.

Prospa is new to New Zealand, so its success will depend on how attractive its borrowing rates are and how good its client service is. If you have used Prospa, or have an experience to share, please contact our research team.
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