What is the rate for an unsecured loan?

Each fintech lender has their own way of assessing risk. Their approach is called “Risk for Rate”. It has been said that some lenders have over 300 data points when assessing an application. Most fintech lenders weigh their assessment heavily on the transaction history seen in your bank business account. Some of the data points include:

• Red flags such as reversals, dishonours, overdrawings
• How many loans, therefor how leveraged is the business
• Volume of cash deposits
• Gambling related transactions
• Debt collection
• Tax Debt
• Credit Score and adverse on file

At Sqale Finance, our top 7 lenders rates calculated as an annual simple interest can range from 8%-20%. Our next 3 lenders (typically used as bridging finance) can cost upwards to 30% annually. In most cases, our clients would exit these loans after a few months to ensure they do not absorb such an overall cost.

Traditionally, most clients would be used to comparing rates to the major banks however when supporting SME’s, the need usually outweighs the cost. Our advisory approach will ensure our clients are well informed about the products available, it’s features, benefits and cost impact so they can make a strategic decision on the most suitable loan for their needs.

“When business owners raise the question about rates, I often ask them what was their need in coming to see us in the first place” – Yuan Chong, Finance Partner at Sqale