It's been a year since we last wrote about ANEXT and their innovative financing solution for SMEs with ZERO document requirements. Since then, much has changed, and we think it's time we provided an update. We are also still waiting for their competitor, Maribank from Sea Group. Where are they? It has been a year…
Now, let's get back to ANEXT. Here, we want to review their remarkable entry into SME financing.
Now that we have seen this firsthand, we can confirm that this is real. Many of the SMEs we interacted with managed to receive offers of up to S$30,000 without submitting a single document. This is an opportunity for many SMEs that primarily operate as cash businesses (e.g., hawkers, kiosks) to access financing. These SMEs are creditworthy businesses whose owners have a good personal credit track record and are therefore no longer penalized for lacking bank credit.
What we also observed: While $30,000 is the upper limit, most SMEs receive loan amounts of S$10,000 with zero documents. While that isn't much, it is a start and can make a difference for many SMEs.
Unfortunately, the zero admin fee that was initially touted is a thing of the past. This is disappointing as they were supposed to be more digital and rely less on manual loan processing. At least for some clients with simple requirements, admin fees should be waived, but oh well…
Thankfully, loan results are still processed quickly, both for zero documents or with documents. Although it seems that if you do not have a good bank credit history or balance, it might be safer to take the no-document route. While it is a smaller loan amount, your approval rate could be higher. Nonetheless, results are out as fast as 5 minutes.
One thing we observed in the application process is that it favors borrowers with simpler ownership structures. Firstly, complex ownerships (i.e., corporate ownership with many layers) do not qualify for digital approvals, and a sales representative will need to gather more information from you. Secondly, all individual shareholders and directors need to be involved in the loan application process. The application triggers an approval via Singpass for each of them to verify. Therefore, make sure all your directors and shareholders are on board and ready to support your application. Lastly, all shareholders are guarantors for the loan, and you cannot exclude them. This makes certain applications sensitive, as not all shareholders are willing to come in to guarantee a loan. Typically, for other banks or lenders, a 30% or 50% shareholding is minimally required rather than 100%.
ANEXT may not be perfect, but it is definitely a bank not to miss for an SME loan with its zero-document application and quick approvals, living up to its digital bank status. There are downsides like inflexible policies requiring approvals from all shareholders and directors in the application. Another thing to note is that there are no relationship managers or branches. So if you can't figure out their digital onboarding process, you might find it very frustrating. In such situations, speak to us at Lendingpot, and we will always be happy to assist.
As for rates, let's just hope that more competition in the years to come from GXS and Maribank will help bring back those zero admin fee days. Regarding revised rates for ANEXT, please refer below:
Benjamin heads up Lendingpot with a background in all things SME. He was previously a commercial banker at Citi with experience in Relationship management, Credit Risk, Trade Operations and Corporate FX sales; and understands the difficulties SMEs face in this opaque world of SME financing.