TruePillars, an online marketplace lender allowing everyday Australians to fund loans to small businesses, today announced it has raised a total of AU$5 million in a Series-A funding round.
The funding round was led by a long-term Melbourne-based private investor and includes both equity and commitments by shareholders to fund loans to Australian businesses on the TruePillars platform.
Further commitments from additional investors are expected to be finalised by September 30.
The business will now commence a recruitment drive to more than double its number of employees over the next 12 months.
“This investment will give us the means to further innovate and build on our service, including our ground-breaking secondary marketplace which allows investors to liquidate their investments ahead of schedule by selling to another investor in real time,” says John Baini, TruePillars co-founder and CEO.
The secondary marketplace feature has proven extremely popular, with over 3,000 separate transactions completed since it launched in November 2016.
Launched in June 2016, TruePillars’ allows multiple investors to fund small business loans of their choice with a minimum commitment of just $50 per loan.
It gives investors the opportunity to build a portfolio of positions in multiple loans and receive their share of the monthly repayments of capital plus interest, with a net average return of 13.0% p.a. on the total TruePillars loan portfolio to date.
Unlike other non-bank business lenders, TruePillars offers long-term loans of up to five years at competitive interest rates without the insistence on property security.
“Since launching last year, we have helped fund dozens of businesses that may not otherwise have secured a loan, enabling them to grow, employ more people and innovate,” says Baini.
“We’re now able to go forward with some exciting plans to really unlock the potential of this community we are building.”
One such business is Sydney-based Ladies Running Errands, whose founder Maria Xynias has added a new franchise in Sydney and is in advanced discussions with several more in both Sydney and Melbourne since 66 investors funded her loan in October 2016.
Xynias saw an opportunity to expand the business but struggled to get a loan from the bank.
“I wish I knew how difficult it was going to be to get a business loan. The big banks want collateral. The fact that you’re earning lots of money doesn’t matter,” says Xynias.
“TruePillars looked at my business, saw my potential, earnings and where we were going. All I needed was a little bit of help to get me there."
TruePillars’ vision of providing a fairly-priced loan that gives businesses time and space to grow – something that’s missing from the Australian financial landscape – has paid off.
“If you’re a profitable business with an established track record, don’t be fooled into paying two to three times more than you have to. We have a growing community of fair-minded investors who are ready and waiting to help Australian businesses succeed,” says Baini.