The TruePillars platform has been set up by John Baini, a self-described career banker with senior experience with NAB and Royal Bank of Scotland in the UK, Europe and the Middle East.
Under the TruePillars platform, businesses apply online for loans between $15,000 and $250,000.
If they pass assessments for their ability to repay the loan, they are given a risk rating and this is displayed to registered investors in the online marketplace, along with other information provided by the business.
Investors who join online can browse the marketplace and make investments from as little as $50 in the businesses they like.
Mr Baini said he established his fintech start-up business after witnessing the successful rise of marketplace lending in the UK and Europe.
“In the UK in particular, marketplace lending has been responsible for significant job creation and excellent investor returns. It’s a clear win-win,” Mr Baini said.
“SMEs in Australia have a long history of difficulty in obtaining finance to expand unless they have property to offer as collateral.
“This often means they can’t expand, even though business is booming. Given that nearly three quarters of Australians are employed in small to mid-sized businesses, this puts a significant brake on national economic growth,” he said.
The TruePillars lending model fixes that problem, Mr Baini said.
“We use our expertise in assessing established businesses for their ability to repay a loan, rather than focusing on collateral if they can’t. We simply don’t approve loans for businesses we believe shouldn’t be borrowing. It’s a better option for both businesses and investors.”