Fintech start-up Avenue Bank has created an innovative product for the business banking market that will seek to unlock almost $10 billion of small business cash that is tied up in bank guarantees used to secure commercial leases.
The new product could be used by commercial landlords such as Dexus to help attract and retain tenants, and leasing agents such as Colliers are also backing it as a way to speed up property deals. After raising equity at 30¢ a share in July 2022, the current offer has been priced at 35¢ a share. Avenue will require more capital after its full licence is awarded, and the final amount will depend on how fast it grows and when it starts offering loans.
Avenue has received 19 letters of support from landlords, leasing agents and tenant advisers, it told potential investors at a presentation in November. Some landlords are considering using the product as a retention tool to put money back in the hands of tenants.
unsecured lending to small businesses… what could go wrong 🙄🙄