The Code of Lending Practice and SMART Box ™ helps business owners make the most informed decision possible on their business funding options.
In June 2018, Spotcap was one of the founding signatories to the Code of Lending Practice, a commitment which aimed to make it easier for business owners to make informed decisions about their finance options and increase transparency across the Australian online business loan sector.
Spotcap is now excited to announce that as of the 1 January 2019, the code is officially active, empowering business owners and establishing a new level of industry best practice in the small business finance space.
What is SMART Box ™ and how will it help business owners in Australia?
It can often be difficult and overwhelming for business owners to compare and choose the funding product that best suits them, with so many options out there from both traditional banks as well as the newer alternative finance providers
As a part of the Code of Lending Practice, all borrowers will now receive a SMART Box ™ with their loan offer, a document that stands for ‘Straightforward Metrics Around Rate and Total cost’.
Essentially, this one-page loan comparison tool will help business owners better understand what the true cost of the loan is that has been made available to them.
SMART Box™ includes clear and consistent pricing, calculations and metric explanations. It discloses the Total Cost of Credit, Average Monthly Payment, the Annual Percentage Rate (APR), and more.
When this information is presented in a simplified way, small businesses are empowered to make an informed decision about what product is most suited for them.
Small businesses are the lifeblood of the Australian economy, and any step that supports their access to growth finance and improves industry transparency is something Spotcap is proud to be a part of.
Why do we need transparency?
Customers demand transparency from their financial service providers. This demand is higher than ever before following the widely publicised findings from the Banking Royal Commission that took place during 2018.
One of the impacts from the Royal Commission is that traditional lenders are further pulling back on small business lending, creating a gap that alternative lenders are rapidly bridging.
With their growing responsibility in the market, the leading fintech players wanted to establish a lending environment with a foundation of trust and transparency.
The Code is a big step forward in facilitating this environment, giving customers the ability to identify trusted lenders with an accreditation ‘trustmark’, and an easy platform to compare different loan products. Make sure you look for this ‘trustmark’ when dealing with an online lender for your business finance.
Spotcap is committed to transparent lending, which is why we have introduced SMART Box™ to each and every one of our business loan contracts.
Want to find out more?
Here's everything you need to know about Spotcap's introduction of SMART BoxClick Here
Originally published February 13 2019 , updated February 22 2019