What’s in this Guide?
|🗺️ Products||Business Loans|
|💰Funding Amount||$20,000 to $500,000|
|📊 Loan Terms||6 to 24 Months|
|💰 Min. Trading Period||24 Months|
|💰 Min. Trading Turnover||$500,000 per annum|
|🛍️ Unsecured/Secured||Unsecured if < $250,000|
|💳 Funding Speed||24-72 hours|
|Loan Products||Unsecured business loan|
|Loan Terms & Funding Size|
|💰 Loan Amount||$20,000 to $500,000|
|⏳ Loan Length||6 to 24 months|
|📆Payment schedule||Weekly, fortnightly or monthly|
|💳 Line of Credit Option?||❌|
|💸Fees (exc. interest)||Origination fees -
1.5% (6 months), 2.25% (12 months), 2.5% (18 months), 2.75% (24 months)
|﹪Interest Rate Type||Fixed fee (inclusive of interest and other charges) in equal installments|
|🔓 Unsecured Loans?||✔️ (Directors guarantee required)
If > $250,000 then security deed required
|👍 Early Repayment||✔️ (Discount on fixed fee)|
|🎓 Qualification Basics||ABN or ACN
|🛍️ Min. Trading Qualification||24 Months,
3 months of bank statements
|📅 Min. Turnover Qualification||$500,000 per annum|
|🗎 Low Doc Loans||❌|
|😕 Bad Credit OK?||Veda Score greater than 550|
|Approval & Funding Speed|
|🏍 Fast Online Application||Medium|
|💨 Funding Speed||Within 24 hours of approval|
Banjo Pros and Cons
Products – Banjo business loans available
Only one loan product is available with Banjo loans, which the business lender call their ‘Unsecured business loan’.
While these loans require no collateral, loans above $250,000 will need a security deed.
- Unsecured business loans
Banjo Unsecured business loans
Unsecured business loan eligibility / qualification:
Minimum Time In Business
$500,000 Per Year
Credit Score of 550 for Directors (Equifax)
ABN or ACN
3 Months Bank Statements
Banjo loan requires your business has a trading history of 2 years and $500,000 of annual turnover (which equates to around $41,666 in monthly turnover).
This is a higher bar than many other online lenders, which will allow businesses to have as little as 3 to 6-month trading history and $50,000 to $100,000 in annual turnover.
More stringent lending criteria can reflect the type of customers the SME lender targets. Small businesses or medium businesses using Banjo Loans will usually have revenue up to $5 million, been operating for an average of 10 years and have less than 20 staff.
Tighter lending criteria can also reflect the larger size of the loan Banjo give to clients. While most lenders minimum loans start from $5,000, Banjo loans start from $20,000.
Banjo’s tighter lending criteria in some respects can be seen in a favourable light as it ensures only they only lend to businesses that are likely to afford to repay the loan. This ensures Banjo is unlikely to go into liquidation, meaning existing borrowers don’t need to be concerned that their capital may be at risk.
Your business will require an ABN or ACN as proof you are an Australian business as Banjo don’t give personal loans. Directors will require an Equifax credit score of 550, which is the average score for Australian borrowers with a credit history and means Banjo may not be suitable for business owners with a history of bad credit. Banjo loans require the directors’ credit score as a Director’s guarantee for the loan may need to be provided in certain circumstances such as loans above $250,000.
Unsecured business loan funding size and loan terms
$20,000 to $500,000
6, 12, 18, 24 Months Fixed Terms
Weekly, Fortnightly Monthly
Low Doc Loans
Security deed if > $250,000
Banjo loans range from $20,000 to $500,000 and you can have as long as 24 months. Shorter loans will come with a higher interest rate but can save you on costs, as long-term loans may accrue more interest costs over the life of the loan. When making payments for the loan, you can choose from a weekly, fortnightly or monthly cycle, whichever best matches your cash flow.
Flexi Payment Options
Which term length is for you
- 6 months
Perfect for short term working capital needs such as wages,
ATO payments, stock purchases
- 12 months
Ideal for medium-term capital needs like marketing campaigns, refurbishment of workplaces, etc
- 18 months
Consider purchases, project requirements, etc
- 24 months
The term option for longer-term cashflow considerations
Unsecured business loan costs and fees
1.5% for 6 Months
2.25% for 12 Months
2.5% for 18 Months
2.75 For 24 Months
Fixed fee (principal + interest) inclusive of all charges
in equal instalments
3-4 Month Interest-only period available
Other Cost Notes
No Hidden fees
Early Payment Permitted
There are two simple standard costs when taking a loan with Banjo Loans, these are obligation fees and fixed fees.
When taking out a loan with Banjo, you will need to pay an origination fee, This will vary depending on the length of the loan, loan of 6 months will be 1.5% while loans of 24 months will be 2.75%. Banjo subtract this fee from the total loan amount you borrow, which means you will receive less capital than you request. Sometimes called an establishment or commitment fee, lender charge this as the cost to verify your application and business details.
Banjo charge fixed fees (sometimes called interest expense) rather than variable interest rates, and this fee is inclusive of all costs. Fixed fee means you will pay the same amount each payment cycle, this means you can plan all your loan expenses in advance. The fees this SME lender charges will depend on the business circumstances and will depend on factors such as the business’s credit history, the number of funds the business requires, and the cash flow the business has. Businesses with a strong credit history and a stable history of turnover should expect better rates.
Fixed cost is good for transparency and this lender does not have any hidden fees however there are some minor details to be aware of.
- You will need to pay a fee if you repay your loan early, this will be a discount on the costs you would otherwise pay
- In some circumstance, you may require collateral (usually loans above $250,000)
- Dishonour or late fees and default costs, these are fees you should expect from all lenders.
- Flexi Working Capital – interest expense only repayment period
- Flexi Working Capital 12 months
- The Ability to select an interest expense only repayment period to align with your annual business cashflow cycle
- Flexi Working Capital 16 months
- The ability to select an Interest Expense only repayment period to align with your business cashflow cycle
Banjo loans honesty and transparency
When taking a loan with Banjo, you can expect the lender to be open and honest with the details of your loan. Before signing a loan agreement, you can expect a statement detailing all your costs in depth. This will include the following metrics:
- Total Cost of Credit
- Simple Annual Interest Rate
- Total Interest Percentage
- Annual Percentage Rate
Of these metrics, the most important is:
- Total Cost of Credit, which is fixed fees + origination fees or how much you will actually pay (if you pay normal costs on time)
- Annual Percentage Rate / Average monthly payment which the total amount you can expect to pay each payment schedule
Some lenders quote simple annual interest, which does not show your true ultimate cost, which is why Banjo gets high marks for transparancy.
Ease of application and application process
Banjo’s online application is one of the more extensive online application processes of all online Fintech lenders. While you need to provide a high level of detail, the good news is that the application needs little paperwork and Banjo accept electronic signatures. The application will take you 10 to 15 minutes and faster if you have the information you need ready.
You will know within hours how successful your application is. This is because the Banjo loans platform can to automatically assess most of the business and personal data through credit checks and ID verification. As part of the application, you will need to provide your business ABN and bank account number and link accounting products such as Xero and MYOB; you can also upload from desktop software such as MYOB and Reckon.
As part of the application process, you will need to provide:
- The length of the loan – 6, 12, 18, 24 months
- The interest-free period you require
- The amount you would like to borrow
- Preferred payment frequency
- What you will use the loan for
- How long the business has been trading for
- Expected revenue for the next 12 months
- Number of employees
- The proportion of revenue from top 4 customers
- Late payment history
- All business bank accounts (and they must allow direct debit)
Once you provide all the above information, Banjo will ask you to upload business financial statements as a PDF, excel or word document and link your Xero or MYOB accounting products.
Personal detail about the directors will also need to be provided so Banjo loan can perform a credit check.
Within 24-72 hours of approval
Applications can be done online and take just a few minutes, this is because you only need to answer 10 simple questions. Even better, you will not need any paperwork as part of the application and the lender accepts electronic signatures.
You will have access to funding within 24 hours to 72 hours if you provide the correct information and Banjo approve the loan request.
What can you use the loan for?
As long as the loan is for a business purpose, there are no restrictions.
Banjo Loans Review – Discounts
If you repay your loan early, then Banjo will provide a discount on the agreed fixed fee.
Banjo Loans Review – Customer Service
Banjo customer service team are based in Australia. The team comprises of staff with banking experience so that the financial services provider can deliver top customer services and support.
Banjo Loans Review – Trustpilot And Reviews
5 star from 284 reviews shows Banjo has a high level of satisfied clients, 96% rate Banjo as excellent and the remaining 4% as great.
Reviews in Trustpilot speak highly of the experience they had with Banjo. Many reviews comment that application to approval is quick and easy and appreciate that the process is done by humans, not automation. This allowed many businesses to get a loan that reflects their circumstances, especially through the difficult time many experienced with the COVID-19 virus. Some reviewers feel Banjo offer the best value product in the SME lending industry.
Banjo Loans review Conclusion
Banjo specialise in just one product, this being business loans for small businesses. In a crowded marketBanjo has a number of features that make them stand out. including extra flexible loan terms. The lender also offers loans up to $500,000 which is larger than many lenders so make them a good choice if you need loans of a significant amount.
Other features to note include:
About Banjo Loans
Banjo Loans was started by the current CEO Andrew Colliver and a team of former National Australia Bank executives in 2015. Since this time the fintech has lent more than $250 million in loans.
Banjo Loans was created when it was noticed Andrew realised that online lenders overseas grew post-GFC due to a need to address the difficulty small businesses had in obtaining capital. With this understanding, research found Australian small businesses have the same difficulty.
With approval for credit cards taking 7 to 10 days and business loans between 30-60 days, Banjo seeks to reduce the time from application to funding for businesses.
Research by Banjo staff also found the cost of a business loan was 200 basis points larger than the average cost of a home loan. To solve this, Banjo has a focus on providing a service with lower loan costs than banks offers.
Lastly, Banjo aims to give clients a superior customer experience. Banjo use analytics to better understand clients. This helps ensure Banjo can offer a better value proposition than their competitors when it comes to applying for a loan and customer relationships.
Banjo address is
Level 2, 561 Church Street, Richmond, Victoria 3121
Banjo Small Business Loan Fund ABN 32 713 685 984 (AFSL 468033) with loans provided by FundIT Ltd ACN 601 130 527 as the trustee.