The Big Four banks and start-ups: How they measure up

Above: Barbera from bank world should not be an inspiration when it comes to lending to start-ups.

Start-ups will no doubt welcome ANZ’s pledge to lend $1 billion to new businesses – albeit with no accompanying easing of lending criteria – but it’s unclear whether the move will up the ante on the other ‘Big Four’ banks to do more for Australian enterprises.

ANZ said it will sink $1 billion into start-ups over the next 12 months as it seeks to become the bank of choice for Australia’s small businesses.

But what of its main rivals? What kind of deal are start-ups getting from the rest of the Big Four?

Here’s a snapshot of what’s currently on offer from the other major banks.

National Australia Bank

According to Joseph Healy, NAB group executive of business banking, NAB is Australia’s largest business bank and has the greatest share of lending to small businesses at 24%.

“We are also the only bank with a long-running microfinance loan scheme, which provides unsecured loans, ranging from $500 to $20,000, to entrepreneurs who have a business idea but no cash or assets to start a business,” Healy says.

“Research has shown that this generated more than $44 million in turnover and created approximately 300 jobs in the first five years.

“However, we also recognise small businesses often need more than just funding.

“We’ve partnered with leading small business advocate COSBOA via the secondment of a NAB employee who will provide advice and guidance on a wide range of issues facing the small business sector.

“We also continue to invest in the number of business bankers supporting small businesses.”

Commonwealth Bank

In addition to a business start-up checklist, CBA has introduced its Start a Business tool. This three-step tool helps customers find the best banking solutions for their new business.

Among CBA’s range of lending options is the BetterBusiness Loan, which offers fixed and variable interest rates, with a choice of repayment options.

A BetterBusiness Loan is available for business loans over $50,000, where the loan term is not less than one year.

Meanwhile, CBA’s bill facility enables customers to manage cashflow more effectively by allowing them to repay their loan at a future date. The minimum borrowing amount is $500,000.

CBA has also partnered with the world’s largest card scheme, UnionPay, in a bid to help Australian businesses reach up to 700,000 potential new customers every year.

“From mid 2013, Commonwealth Bank will start to roll out UnionPay to your Commonwealth Bank EFTPOS Lite, Plus, Mobile or Integrated terminal,” the bank says on its website.

Westpac

Westpac has summarised the key steps to consider when starting a business, and where to find more details for business planning, setting up the business and banking solutions.

The bank prides itself on its Business One account, a day-to-day transaction account with low fees.

Westpac also has a range of merchant services, including EFTPOS terminals as well as online and mobile solutions.

“Our most popular product is Mobile EFTPOS, a handheld mobile wireless EFTPOS terminal ideal for taking to customers,” Westpac says on its website.

Westpac also believes it has a wide range of business lending solutions, including its Flexi Loan, which allows customers to consolidate their debts into one monthly repayment.

Customers can apply for a credit limit between $4,000 and $75,000. While there is a $150 start-up fee, there is no fee for additional withdrawals, no early repayment fee and no exit fee.