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Report: American Express Pursuing Australia SMB Loans

American Express may use its powerful global brand “to attempt to muscle in on small businesses lending in Australia,” according to an analysis published in the country’s Financial Review.

The analysis concludes that a move into the sector by American Express could lure business from big banks in Australia as well as from smaller lenders such as Judo Bank and Prospa.

The Financial Review quoted American Express Australia Vice President of Global Commercial Services Martin Seward as having said he thinks there’s a market for small and medium-sized businesses (SMBs) that need capital.

“This is an intentional move for us,” Seward reportedly said. “The aspiration for our global commercial payments business is to be essential for customers’ everyday needs, and we think that will come from satisfying more of their needs.”

According to the Financial Review, American Express plans to offer the SMB unsecured loans to cardholders and merchants that accept Amex card payments. The loans will carry interest of 10.95 percent annually.

The Financial Review analysis stated that a number of larger banks offer business loans similar to those American Express will provide, but those bank loans require collateral.

In a late-January earnings report, American Express stated that while its business serving travelers was suffering due to COVID-19, delinquency rates on cards are among the lowest in years. Unlike other card issuers, American Express requires cardholders to pay balances off in full at the end of each month.

According to American Express financial filings, small and medium-sized business clients account for 39 percent of the company’s business.

In the United States, according to American Express marketing materials, the company provides loans to SMBs of between $3,500 and $75,000 with annual percentage rates between 6.98 percent and 19.97 percent and terms of 6, 12, 24 or 36 months.



About: Buy Now, Pay Later: Millennials And The Shifting Dynamics Of Online Credit, a PYMNTS and PayPal collaboration, examines the demand for new flexible credit options as well as how consumers, especially those in the millennial demographic, are paying online. The study is based on two surveys, totaling nearly 15,000 U.S. consumers.

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