What’s That Ticking Sound?

The ever busy small business ombudsman, Kate Carnell is expecting an “insolvency explosion” once government Covid-19 support ends pointing to ASIC data which shows external administrator appointments were up 23% in December

This week she urged business owners to take action before things go bad and protect themselves by registering assets on the Personal Property Securities Register (PPSR).

The ombudsmen is encouraged by news that Treasury is considering a business loan scheme that would operate in the same way as a student loan.

Covid hit businesses could borrow funds, but not repay them until their turnover reached a prescribed level.  Loans would be capped at a percentage of a company’s annual revenue.

Funds Flow

Businesses which hire an employee between October 7, 2020 and October 6 2021, can now claim up $200 a week for a year from the hiring date.  Funds begin to flow this month.

Disruptor disrupted

National Australia Bank has spent $220m to buy the oddly-named neobank 86 400 folding it into its online-banking subsidiary UBank.

Self-styled as “Australia’s Smart Bank”, 86 400 claimed to have more than 85,000 customers, $375m in deposits and $270m in residential mortgages,

Turns out the smart move was  to climb into bed with a company it had previously been trying to disrupt.

86 400 became an authorised deposit-taking institution in mid-2019.   It outlasted  Xinja Bank which returned its license in December 2020 and exited stage left complaining about difficulty raising capital.  Where do they get these names from? 

Heavyweights Go The Biff

The Nation’s largest bank, CBA, has revealed an ambition to confront NAB in the lucrative business customer arena, Grace Moullakis reports in The Australian

In a statement to the ASX the Bank said it’s strategy was to be number one in business banking – a clear challenge to the current title holder.

Can’t help thinking that both lenders will have to polish their sales pitches to cynical SMB’s and spend considerable time, effort and money to reverse the tide of non-bank lenders steadily chipping away at their market dominance.

Customer Kickbacks

The highly competitive mortgage industry is being advised to offer kickbacks to customers to win more business.

Comparison site Finder.com says a survey of 1,004 respondents revealed that 25% would prefer a cashback offer over a lower interest rate.

Apparently, inducements of between $1,000 and $4,000 are increasingly being offered as lenders entice borrowers to switch loans.

Fintechs Excited

The governments new credit reporting regime has passed in parliament and fintechs see an opportunity for growth.

The mandatory code levels the playing field for fintechs, according to Simone Joyce chair of FinTech Australia.

The new rules are designed so that lenders must share information about a borrower’s credit history.

Fintechs say that having this information will allow them to better assess a borrower’s credit position and provide the best options.

Short Selling 101

How does short selling work?  it’s a question being asked around the kitchen table in the aftermath of the GameStop kerfuffle.

If you want to be the know-all at the table, here’s a video which explains what it is and how it works in a way even a 14-year-old gamer would understand. https://www.youtube.com/watch?v=CAs_aX95tVQ

Good luck, Boomer.