What’s in this Guide?
- Banjo loan products
- Qualifying for a loan with Banjo
- About Working capital loans
- Working capital loan interest rate/costs
- About Flexi working capital loans
- Flexi working capital loan interest rate/costs
- About Banjo Supply
- Ease of application and application process
- Funding speed
- Transparency and honesty
- Banjo Loans customer service
- Banjo Loans customer reviews + Trustpilot
- About Banjo Loans
Banjo is an online business lender that specialises in providing unsecured business loans to small and medium Australian businesses. As long as your business has been in operations for at least 2 years, earns $500,000+ in annual sales, and has decent creditworthiness then you can borrow up to $1.000,000 over 2 years with this business lender.
|🗺️ Products||Working Capital Loans
Banjo Single Pay
|💰Funding Amount||$20,000 to $1,000,000 (3 Products)
or $5,000 to $25,000 (Banjo Supply)
|📊 Loan Terms||6 to 36 Months (Working Capital)
2 to 6 months (Single Pay)
30 to 90 days (Banjo Supply)
|Min. Trading Period||24 Months|
|Min. Trading Turnover||$500,000 per annum|
|🛍️ Unsecured/Secured||Unsecured if < $250,000|
|💳 Funding Speed||Same day Approval
Funding After 24 hours
|Loan Products||Working Capital Loans And |
Flexi Working Capital Loans
|Banjo Supply||Single Pay (Bridge Loans)|
|Loan Terms & Funding Size|
|💰 Loan Amount||$20,000 to $1,000,000||$5,000 to $25,000||$20,000 to $1,000,000|
|⏳ Loan Length||6 to 36 months||30 to 90 days||2 to 6 months|
|📆Payment schedule||Weekly, fortnightly or monthly||Weekly, fortnightly or monthly||Interest costs only (with principal paid at maturity.)|
|💳 Line of Credit Option?||❌||❌||❌|
|💸Origination Fees||1.5% (6 months)|
2.25% (12 months)
2.5% (18 months
2.75% (24 months)
3.0% (36 months)
|4% (Flat rate)|
|﹪Interest Rate Type||Fixed fee (inclusive of interest and other charges) in equal installments |
4 Months Interest Free with Flexi
|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|
|ABN or ACN|
|ABN or ACN
|🛍️ Min. Trading Qualification||24 Months Of Trading||24 Months Of Trading||24 Months Of Trading|
|📅 Min. Turnover Qualification||$500,000 per annum||$500,000 per annum||$500,000 per annum|
|🗎 Low Doc Loans||❌||❌||❌|
|😕 Bad Credit OK?|
|Approval & Funding Speed|
|🏍 Fast Online Application||Same Day Approval||Instant Approval Outcome|
|💨 Funding Speed||As soon as 24 hours after approval||As soon as 24 hours after approval|
Banjo Loans Advantages and Disadvantages
Products – Banjo business loans available
Banjo offers a choice of 4 types of loans. Each type of loan benefits a particular business need.
A working capital loan is best when you need a lump sum and know how much capital you need in advance.
Flexi working capital loans are for Australian businesses with seasonal or cyclical revenue as they offer interest-only repayment periods when revenue is low.
Banjo supply is for when you need business finance under $25,000 fast.
Single pay which are bridging loans, that only require repayment at the completion of the loan term
If you borrow under $250,000 then it will be an unsecured loan, loans above $250,000 may require backing with some form of asset.
All loans will require a director’s guarantee and loans above $250,000 will need a security deed.
Banjo Qualification (all loan products)
Banjo loan requires your business has a trading history of 2 years and $500,000 in annual turnover (which equates to around $41,666 in monthly turnover).
This is a higher bar than many other online lenders require. Most lenders 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, have been operating for an average of 10 years, and have less than 20 staff.
In short, Banjo is looking for clients with strong creditworthiness. For this reason, Banjo doesn’t lend to construction, agriculture, or utility industries along with start-ups or businesses with bad credit.
Banjo also will not lend to borrowers intending to use the capital for personal loans, loans must be for business purposes.
Banjo Working Capital Loans Details
If you need capital to fund everyday business expenses such as payroll, operational costs, rent, and plug cash flow gaps then a Banjo’s working capital business loan could be an option.
Working capital loans work the same as a traditional business term loan, which means you get a lump sum that you will need to repay at regular intervals over the loan term.
Choose this type with Banjo if you know in advance exactly how much you need and your business has stable revenue through the business cycle. If your business has cyclical or season turnover, then Banjo’s Flexi Working Capital loan may be a better option. Those needing loans under $25,000 should consider Banjo Supply.
Working capital loans with banjo can be between $20,000 and $1,000,000. Small business owners should expect to access capital in line with about 1 month of turnover the business gets.
Banjo’s working capital loans come with a choice of 4 loan terms. These can be 6,12,18, 24 and 36 months.
Choose 6 months for smaller, more immediate business costs such as inventory or stock, staff payroll and tax payments.
The 12 month repayment option is better for medium costs such as marketing campaigns and workplace refurbishment.
Your business may wish to consider 18 months for larger purchases such as equipment and project needs.
Loans that will take longer than 18 months to repay, should take the 2 or 3 year option.
When choosing your repayment terms, you will also need to decide on your payment schedule. This can be weekly, fortnightly, or monthly.
Working capital loan costs and fees
There are two simple standard costs when taking a working capital 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 which will vary depending on the length of the loan:
- 6 months – 1.5%
- 12 months – 2.25%
- 18 months – 2.5%
- 24 months – 2.75%
- 36 months – 3.0%
Banjo subtracts 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, lenders charge this as the cost to verify your application and business details.
Banjo charges 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 such as the creditworthiness of the business, how much capital the business requires, and the cash flow of the business. Businesses with a strong credit history and a stable history of turnover should expect better rates.
While Banjo does not provide the fixed fees they charge, they provide a calculator that indicates the typical average fixed fee costs and repayment. This is only a very basic example since it does not consider the creditworthiness of the business, the loan amount, or terms.
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 circumstances, you may require collateral (usually loans above $250,000) along with a registration fee.
- Dishonour or late fees and default costs.
Flexi working capital loans
As with the working capital loans, Flexi working capital loans is a business term loan, which means you receive a lump sum that you repay with interest. The difference is that the Flexi working capital loan comes with an interest-only payment period. meaning you don’t pay the principal during this time.
Flexi business loans are suitable if your business has business cycles with low revenue or fluctuating cash flow. Businesses such as those in tourism and hospitality, sports, and recreation that have yearly high and low seasons will benefit from this loan.
When choosing a Flexi working capital loan, you have the option 12 months and a 3 months interest-only period or 16 months and 4 month interest-only period. During this time, you will not need to pay the principal, only the interest.
When applying for a loan, using Flexi, you can select the month you wish the interest-only period to begin. This period will be 3 or 4 consecutive months depending if your loan is 12 or 16 months.
Like with the working capital loan, you have a choice of payment schedule which can be weekly, fortnightly or monthly.
Flexi working capital loan costs and fees
Obligation costs are the first major cost you will encounter with Flexi working capital loan. The following obligation costs will apply:
- 12 months – 2.25%
- 16 months – between 2.25% and 2.5%
You will also have interest rate costs. While Banjo doesn’t show their interest costs, they are likely to be the same as for a working capital loan. Just keep in mind that there will be an interest-only period, meaning you don’t pay the principal during this time.
Other costs to be aware of include:
- Early repayment: Since Banjo uses fixed fees, you will only receive a discount on the rest of the interest expense amount.
- Security registration (if you need to provide security)
- Late payment fees
Banjo supply is for a smaller short-term business loan. With this loan, you can borrow $5,000 to $25,000 with a 30 to 90 day repayment term.
The key feature of this loan is a decision on your application can be done instantly. Banjo uses machine learning and artificial intelligence to automate the approval assessment process and make decisions in real-time.
So if you need a smaller loan and you need funding fast then Banjo supply can be a good option.
Banjo single pay
If you are looking for a bridging loan, then this is what Banjo Single Pay is. Bridging loans (sometimes called bridging finance) provide you with instant funding to cover you until known future funding is available. The key difference with a bridging loan is that you repay the loan at maturity, rather than with scheduled payments.
Most people are familiar with bridging loans when it comes to buying property but have not yet sold their own house to make the purchase. A bridging loan is a short term finance solution that buys you time until you have the funds you need.
However, funding as a stop-gap until your property is settled is only one type of loan. Other uses for bridging loans include:
- Refinancing of existing loans
- Pending equity injection
- Sale of assets or equipment
- Sale of business
Banjo Single Pay details
Bridging loans range from $20,000 to $1,000,000 covering a period of 2 to 6 months. Payment on the principal can be done as a single payment at maturity (or earlier) with only scheduled interest expenses until the loan is closed.
Since bridging loans are only a temporary stop-gap, the loan is secured using known future income. This can be in the form of the invoices owing or while you await payments for assets the business owns such as property, machinery or even the business itself.
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 will get 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 metrics are:
- 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 transparency.
Despite this, Banjo is not a member of the Australia Financial Industry Associations Code of best practice lending principles. This means you will not get a SMART Box™ document like with Prospa, Lumi, OnDeck, Zip Business, and GetCapital. The quote Banjo provides however, does use the same metrics as SMART Box™ so you should be able to compare quotes from Banjo with these lenders.
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 accepts 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 automatically assess most of your 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 type of loan (working capital loan, flexi working capital loan, Banjo Supply)
- The length of the loan or 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.
Banjo Loan Assessment
As part of the Banjo Loans assessment process, ID checks will be run on the directors or the business, This is not only because it is part of the lender’s credit assessment process but to meet regulatory requirements.
For this reason, you will need to provide Photo ID such as a drivers licence as Banjo needs to be sure they are checking the right person.
In addition to an ID check, the directors’ credit profile (along with the businesses credit profile) will be checked with a credit agency. This is necessary so Banjo can make responsible lending decisions.
Applications take just a few minutes to complete online, as 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.
Working capital loans and Flexi working capital loans can receive approval on the same day, with funding placed into your account in 24-72 hours,
Banjo supply uses machine learning for immediate assessment and approval. Funding should be transferred to the businesses bank account in 24 to 72 hours.
Banjo Loans Review – Customer Service
Banjo’s customer service team is based in Australia. The team comprises staff with banking experience so that the financial services provider can deliver top customer services and support.
You can contact Banjo through live chat, email, or a 1300 phone number throughout the working week. You will find their staff knowledgeable and helpful.
Banjo also provides a knowledge hub that is full of articles covering a wide range of topics that relate to borrowing and lending.
Banjo Loans Review – Trustpilot And Reviews
5 stars 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 offers the best value product in the SME lending industry.
Banjo Loans review Conclusion
If you are interested in a loan with Banjo, you will one of Banjo’s product meets your business need. Banjo’s term loans are similar to what other lenders offer, with Flexi working capital loans being their most interesting product. However, most lenders will allow an interest-only period so it not all that unique.
Banjo will appeal to clients for the following reasons:
- You plan to re-apply to new loans and want to avoid going through the paperwork in future
- You want a lender that has good transparency with their costs
- An easy online application process
- You wish for interest-only payments (Flexi working capital loans)
- The business needs a large loan amount – up to $1,000,000
- Electronic documentation and signing – no paperwork
- Easy loan management via Banjo Dashboard
- Cloud-based account software integration
The main thing to keep in mind when choosing Banjo is that their loan qualification is more tighter than other lenders. If you do meet their eligibility, then Banjo is a sound choice.
About Banjo Loans
Banjo Loans was started by the current CEO Andrew Colliver, current Chief Technology Officer Julian Hedt and a team of former National Australia Bank (nab) executives in 2015. Since this time, the non-bank lender has lent more than $250 million in loans.
Banjo Loans was created when Andrew realised that online lenders overseas grew post-GFC because of a need to address the difficulty small businesses had in obtaining capital. With this understanding, Andrew’s 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 bank lenders offer.
Lastly, Banjo aims to give clients a superior customer experience. Banjo uses 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’s 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.