A new crop of non-bank lenders is eager to fund Australian startups
Non-bank lenders say Australian startup founders are increasingly considering debt as a financing option.
A new crop of Australian non-bank lenders say founders are increasingly willing to consider debt as a financing option, as startups face increasingly onerous terms when raising equity from traditional venture capital funds.
The venture debt scene in Australia is less established than the traditional venture capital sector, which is now a multi-billion dollar asset class. But with Silicon Valley's oldest venture debt fund scouring Australia for opportunities, the market is beginning to grow in prominence.
Capital Brief spoke to the executives about the landscape of debt-funding Australian startups and the shift they are seeing in attitudes among founders towards using debt to fuel the growth in their businesses.
While venture debt providers typically write loans with very high interest rates, the funding is often used for growth purposes or to bridge a startup to another equity funding round at a higher valuation than they could otherwise achieve. As such, it can be a cheaper funding option for some.
