Elevator Pitch is a regular feature on Lifehacker where we profile startups and new companies and pick their brains for entrepreneurial advice. This week, we’re talking with Richard Blumberg, managing director of Now Finance.
In 128 words or less, explain your business idea.
We established Now Finance to focus on credit worthy Australians who want a personal loan but are unhappy with the poor service, slow turn around and one size fits all approach offered by the banks.
The company offers its personal loan product via three distribution channels – broker, direct and point of sale. The Australian-based customer care centre uniquely provides the same personal loan advisor to guide customers through the initial application process until the loan is finalised. Customers are also able to receive their own personal loan rate without affecting their credit score prior to making an application. All of this is facilitated by a leading technology platform as well as multiple proprietary processes and systems developed by the business.
The business is a balance sheet lenders and funds itself through a sophisticated treasury platform which includes a bank warehouse as well as a number of investor note programs including a dedicated institutional note program.
What strategies are you using to grow and finance your idea?
Driven by regulatory changes and historical behaviour, banks are heavily focused on residential mortgages and credit cards. Few banks specialise in personal loans and many only offer it as an afterthought or if you ask. Even with this indifference, the banking sector has managed to retain 80% to 90% of the very large personal loan market in Australia.
This poor service, high margins and lack of focus defines our opportunity at Now Finance. We are focused on providing a valuable alternative to the banks for personal loans of up to $50,000. Loans are offered via finance brokers and direct to customers via our online portal. We concentrate on providing better service and a positive customer experience. Our Australian-based customer care centre uniquely provides the same personal loan advisor to guide a customer through their initial application process right up until the loan is finalised. The enabler for all of this is a state of the art technology platform, a number of proprietary systems and processes and a great team who puts our customer first.
One of the limiting factors for any non-bank lender is access to funding for its loan book. Our loan volumes have grown by nearly 200% over the last 12 months. This has required a robust and diverse funding platform which we fortunately developed over the last 3 years. We have a mixture of bank warehouse funding, several investor note programs as well as an institutional note program. All of these funding lines mean that we can confidently continue to focus on driving growth in our business.
What’s the biggest challenge facing your business?
Building brand awareness with Australian consumers. Australian customers when looking at a new brand in the finance sector think of banks and payday lenders. The fact is we are neither. We are a personal loan specialist offering a high value add alternative to the banks. Winning market share from the banks by changing customer behaviour is an ongoing challenge that we continue to focus on.
How do you differentiate your business from your competitors?
Service, technology and simplicity. We have developed our business and processes with very high levels of service in mind. Our processes and products have been designed to be simple and easy to understand. Our use of leading edge technology helps us with delivery, improved customer experience while keeping our costs low.
What one phone, tablet or PC application could you not live without?
Google Maps – helpful every day both at home and away
What’s the best piece of business advice you’ve ever received?
Perseverance. How you react to failure or at least the chance of failure often determines how good you are as an entrepreneur.
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