Wonga offering business loans in 15 minutes
When the government and banks fail to lend a hand, the sharks circle. In other completely unrelated news, payday lender, Wonga, are now tottering toward the business loans market. They'll be offering loans of (up to) £10,000 once you've completed an application which takes a paltry 15 minutes.
Small businesses will be given the chance of applying for loans of between £3,000 and £10,000 on terms ranging from one to 52 weeks, repaid weekly. These loans will include an application fee and variable rate interest and start at around 0.3 per cent a week.
Wonga reckon that 55 per cent of small businesses applying for an overdraft for the first time last year were rejected and nearly half of first time loan applications were declined.
Errol Damelin, the company’s founder, said: “Small business lending is broken and we intend to use our platform to offer a real alternative.”
Of course, not everyone is happy about Wonga putting themselves forward as the knights in shining armour for small businesses. Christopher Shaw, CEO of alternative finance specialists, Platform Black, commented: "Taking on sky high APRs in order to meet immediate cash flow requirements is about the worst thing you can do as a business. With loans like this, there's a high probability that short-term pain will result in long-term pain. Wonga say it's inappropriate to look at the APR, as the loans are often taken out for as little as a week — and yet the longest term is 52 weeks. The UK's SMEs need fuel to restart the economy, but not at these prices."
You'll notice, lawyers, that it wasn't us who implied that Wonga are robbing bastards, right? Good.