Illinois could be first state to regulate online small business loans

ILLINOIS NEWS NETWORK

Illinois could become the first state in the country to regulate online loans to small businesses.

Business loans done over the Internet are likely to have little to no oversight regarding how they are presented to the lendee. State Sen. Jacqueline Collins (D-Chicago) and a group of bipartisan state and city of Chicago officials want to create some ground rules for the online outlets that Collins said are largely good companies but can stray into deceptive habits.

All we’re trying to do is help those responsible lenders, but also create some oversight to those who are moving in the direction of being predatory, Collins said.

The Small Business Lending Act of 2016 would require the online companies to register with the Illinois Department of Financial and Professional Regulation as well as always list their interest rate in annual increments. Collins said monthly or even daily interest rates, which are currently offered, can fool businesses into agreeing to rates she described as gouging.

The measure would make online loan outlets limit the number of late fees and early termination fees they are able to impose.

There’s a lack of uniformity among small business loan offers and it makes it difficult to compare loans and to fully understand the terms of the loan, Collins said.

Collins said opponents to the legislation have, surprisingly, included larger banking corporations. She believes they are providing the money for some of the online loans. Opponents say the state should let the federal government handle the regulation of online loan outlets. Collins discounts that idea, saying it could take a decade before anything happens.

That could be five years. That could be ten years, Collins said. Why should that preclude us on the state level from dealing with a problem that exists in the state of Illinois?

Collins said she plans on presenting the bill once the General Assembly reconvenes this November. State Sen. Karen McConnaughay (R-St. Charles) is a co-sponsor of the bill. Collins said the idea for the legislation originated with Chicago Treasurer Kurt Summers.

Square Capital Starts Offering Loans More Broadly

Its not surprising that Square is expanding its lending program beyond just the millions of businesses who use Squares point of sale hardware. New customers will only continue to grow the already burgeoning business. In the second quarter of 2016, Square extended nearly 34,000 business loans totaling $189 million, an increase of 123% year over year and 23% from the previous quarter in 2016. Revenue from Square Capital, and the company’s other software services, was up 130% to $30 million from the same quarter in 2015 and up 25% from the previous quarter in 2016.

The small business lending market will likely also get more competitive for Square as American Express is set to debut a new lending arm later this year.

The goal is to serve all 30 million small businesses in the US with Square Capital, Reses said.

Greece’s National Bank Securittises Business Loans To Raise 300mn

National Bank of Greece (NBG) said on Monday it had concluded the securitisation of business loans which would allow it to raise up to 300 million euros in medium-term funding.

The bank said it would place the senior notes with the European Investment Bank, the European Investment Fund and the European Bank for Reconstruction and Development.

It was the first securitisation transaction since 2007, National Bank said.

It said the transaction sought to enhance the access of Greek small to medium sized businesses to ‘affordable financing’.

Additionally, the bank said it would launch new lending for investment projects in Greece in November, covering a two year period in which more than 2,000 small to medium sized businesses and midcaps stood to benefit.
Source: Reuters

Nova Scotia writes off $8M in bad business loans

Nova Scotia wrote off nearly 10 times more in bad loans in the last fiscal year compared to 2014-2015.

Almost all of the $8 million written off by the province in 2015-16 is attributable to a failed venture capital investment in Origin BioMed Inc. totalling $7,878,219.

There was a small loss $91,767 on L amp; S Lumber Limited.

The final write-off total amounted to $7,969,986, up sharply from $818,215 booked as a loss on three investments in 2014-2015.

Nova Scotia Business Inc. CEO Laurel Broten defended the Origin BioMed loan Thursday.

That company is an investment the province made some time ago through NSBI and it went into receivership, she said.

Nova Scotias venture capital portfolio was valued at $13,055,000 as of March 31 2016, down by more than $2 million from last years total of $15,452,000. This marks a 15.5-per-cent decrease from the previous fiscal year.

However, the 2015-16 year was not all bad news for Nova Scotia, as the province, through NSBI, managed to attract 20 companies to either set up shop or expand their existing operations. This is a 11.1-per-cent increase over the previous fiscal year.

Broten told the Chronicle Herald that these companies were not necessarily serving the local market but rather using Nova Scotia as a base to export their products and services elsewhere.

Exporting and trade in general is an important component of the path to sustainable economic growth in Nova Scotia, and we are committed to supporting businesses here and around the globe, said Broten in a release Thursday.

Looking ahead, the province will continue prioritizing exports from Nova Scotia and targeted investment attraction to help stimulate economic growth.

Having helped seven new companies reporting their first export sale in this fiscal year, NSBI aims to work with a minimum of 15 companies across Nova Scotia to become first-time exporters in 2016-17.

In addition, the NSBI approved 15 film and television productions in its first year of administering the Nova Scotia Film and Television Production Incentive Fund.

There is still much to be done so our client firms can thrive, and not just survive, in our ever-changing global economy, said Broten.

Our plans are built based on the conversations we have had with businesses across the province and from the lessons we learned in 2015-2016.

1MDB: We never offer business loans

1MDB has never offered business loans nor has it ever authorised any party to collect payment or charge fees for processing any application relating to the company.

In a statement, the company said it has been informed that certain individuals were posing as 1MDB officials to offer business loans and collect processing fees.

A police report has been lodged on this matter, said 1MDB.

We request anyone who has been approached in relation to this matter to immediately lodge a police report, it added.

– Bernama

UAE personal loans jump 7.5% to Dh430 billion

Dubai: Unpaid credit card balances, car loans and other forms of personal borrowings continue to hound consumers in the UAE, with total debt levels rising by 7.5 per cent over the past year.

The average resident in the country now carries a debt burden worth Dh42,600, as the total amount of personal loans reached Dh430 billion during the second quarter of 2016, up from Dh400 billion a year earlier.

The latest debt data provided by the National Bank of Abu Dhabi (NBAD) cover the amount of car, credit card and business loans that cash-strapped consumers owe their banks as of June this year.

A number of households have been feeling the pinch and left with no cash buffers as the economic environment remains subdued, owing to the decline in oil prices. Employment opportunities are still limited and reports of job cuts haven’t completely settled , while the high cost of living continues to put pressure on household budgets.

In a recent survey, a significant number of residents said that the high cost of housing and rising education and utility bills remain their biggest concerns. Others, especially Western expatriates and Arabs, are also worried about potential job losses, while 44 per cent of UAE nationals are worried about mounting loans.

Greece’s NBG concludes securitization of business loans

National Bank of Greece said on Monday it had concluded the securitization of business loans which would allow it to raise up to 300 million euros in medium-term funding.

NBG said it would place the senior notes with the European Investment Bank, the European Investment Fund and the European Bank for Reconstruction and Development.

It was the first securitization transaction since 2007, National said.

It said the transaction sought to enhance the access of Greek small to medium-sized businesses to affordable financing.

Additionally, NBG said it would launch new lending for investment projects in Greece in November, covering a two-year period in which more than 2,000 small to medium-sized businesses and mid-caps stood to benefit.

[Reuters]

Business loans to SMEs in SA now possible within three days

POLLEN, the Stellenbosch-based online business lender specialising in small to medium enterprises (SMEs), says it wants to drastically change the SME business lending space — a sector traditionally underserved by South African banks.

The company, which started operating eight months ago, has done R100m in loans, 65% of which are repeat business.

The idea behind Pollen is to give entrepreneurs and SME business owners fast business loans via an online application and vetting platform. Pollen business loans range from R50,000 to R1.5m.

The company believes that making it easier for SMEs to access funding will boost the sector, which was identified by the government as a key jobs driver.

While the National Development Plan (NDP) — the governments blueprint for eliminating poverty and reducing inequality — has set ambitious goals for the SME sector, entrepreneurs continue to face challenges such as red tape, a lack of access to finance and the high cost of doing business.

Pollen CEO Louis du Plessis said SA was way ahead of the global market in terms of online personal loans, with companies such as Wonga and Capitec, but that it lagged behind when it comes to unsecured business loans to the SME market.

Last year, we developed a tech platform to do credit vetting in a short amount of time, and which delivers business loans to SMEs within three days of the application process. I knew there was a vacuum in SA for such a business; that it could solve a major issue facing small to medium businesses here, said Du Plessis.

Du Plessis set up the company with Anglo African providing the funding backbone and operational support.

He said the market for online lending had huge potential since SAs SME sector comprises 1-million registered companies.

Its a substantial market, said Du Plessis, adding that Pollen provided loans to small businesses with an annual turnover of R1m and over, up to medium-sized companies with a turnover of R50m.

Anglo African Group chairperson JP du Plessis said: The financial technology space is a growth industry, and the next-generation lenders such as Pollen, OnDeck, Moula and others are filling a gap left open by traditional banks, which have operated in the same way for over 40 years.