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NAB listens to entrepreneurs about balance and revamps micro loan program

NAB listens to entrepreneurs about balance and revamps micro loan program
January 20, 2018 mmadmin

When Tomas Jajesnica was ready to embrace career change with a new business idea he hit a brick wall. His business plan for a franchise-style meditation service was solidifying but funding was impossible to secure.

“My capacity to get a loan was pretty much non-existent. I had a lot of personal debt. Nobody was keen to lend to me,” said Mr Jajesnica.

Mr Jajesnica’s life was turned around by NAB’s micro-enterprise program. The bank provided him with a small line of credit and access to a mentoring program to get his business off the ground.

His business – Mr Meditate – now employs 11 contractors and counts Melbourne Water, MYOB and law firm Gadens among its client base.

NAB is committed to making $130 million in micro-finance loans to help jump start the business plans of young Australian entrepreneurs. The program has been around since 2007 and has helped over 1800 businesses.

Leigh O’Neill, executive general manager of small business at NAB, said last month the bank was able slash the approval processing time from up to six months to just two weeks.

“NAB’s strategy is about being the best business bank in Australia but we also have a firm belief in financial inclusion. The principle behind the micro-enterprise program is about backing Australians who might not otherwise have the opportunity to start and grow their businesses.”

The rapid turnaround in approval time follows the introduction of QuickBiz, an unsecured lending product which turbocharged turnaround times for loans of up to $100,000 last year to just a few hours as the bank fends off new challengers in the loan approval space.

Ms O’Neill says that feedback from customers helped the bank redesign the program. The target market, often Millennials, found the wait time for the approval process too long. They said loans didn’t need to be more than $10,000 as few needed premises from which to operate.

The program has made $30 million in loans to date and hopes to lift this number significantly following the recent changes. The bank offers loans of between $500 and $10,000 for three years with an interest rate of 9.99 per cent and 90 days interest free.

NAB’s Micro-Enterprise program includes a mentorship program which candidates must participate in. Loans will not be granted until a business plan is approved. Loan customers must be willing to go through a period of training.

Mr Jajesnica was working as a business development manager at a document solutions business for the legal profession when he decided to take the plunge.

A practitioner of meditation since the year 2000, he was deeply disturbed by a survey which revealed lawyers (his customer) had overtaken dentists as the most depressed profession for the first time.

“I used to think that money made people happy until I met a lot of miserable millionaires. I was a real stress-head and tried a lot of techniques. I started doing 10-day silent retreats,” Mr Jajesnica said.

Mr Meditate runs workshops and courses for businesses who want a happier and healthier workforce. The business pitches its services as a positive, practical and proven way of improving business culture and enhancing team performance.

Mr Jajesnica says Mr Meditate’s aim is to provide employees with enough skills to become self-reliant and effectively make its services redundant.

“The goal is to impart the strategies. To help make companies calm and clear,” he said.

 He said the mentoring aspect of the program which gave him access to specialists in operations, sales, marketing, technology and governance was just as valuable as the funding.

“I’m not an advertising expert but as a small business operator you need to be and they helped me take to it the next level and make it effective,” Mr Jajesnica said.

Ms O’Neill said the roadblocks that have prevented many of these entrepreneurs from starting a business can be as varied as the business ideas themselves.

“With some of these customers it is a lack of confidence, they don’t know how to go about it or nobody they know has run a business before or they need a piece of machinery which they haven’t used before,” she said.

Written by James Frost, Australian Financial Review

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