Avenue Bank is awarded a restricted banking licence

Avenue Bank is building a digital business bank, focused on next-generation cash flow solutions for Australian small and medium-sized enterprises. The Sydney-based bank plans to offer new ways for SMEs to unlock thousands of dollars from their balance sheets to help grow their businesses.

The company is one of the first recipients to receive a restricted banking licence since the Australian Prudential Regulation Authority (APRA) recommenced licensing in March 2021. As a Restricted ADI, Avenue Bank will be conducting limited banking business with a select few customers and business partners, prior to an expected full public launch on receiving its full ADI licence.

Avenue Bank CEO, George Confos, says the receipt of its restricted banking licence is a major milestone for the business.

Avenue Bank will offer unique funding opportunities at a time when businesses are still suffering from the on-going impacts of the COVID-19 pandemic. Avenue Bank will inject some much-needed assistance into the traditionally underserviced SME banking sector, at a critical time. “Small business is the growth engine of the economy, and they need finance to grow. We are laser-focused on cutting-edge credit decisioning capabilities to get good businesses the funding they deserve, and quickly, without putting up their home as security,” Mr Confos says.

The RBA notes that about 95 per cent of loans to SMEs are secured, and about half of small business loans are secured by residential property. 

“We are a smart, digital bank that doesn’t rely on bricks-and-mortar security. We are building an automated credit process which focuses on both financial and non-financial aspects of a business. We value the business operator. We value people. We value potential. We monetise that value.”

“We’ve created a credit assessment algorithm that we can industrialise. This is truly unique and proprietary to Avenue Bank and sits nicely with our CreditorWatch pedigree”, Mr Confos says.

Avenue was founded by entrepreneurs Colin Porter and Dale Hurley who previously founded CreditorWatch, a challenger credit reporting bureau.

Avenue Bank recently also closed a $37m Series B funding round. Amongst backers of the business is Liberty Financial Group, a Melbourne-based lender. Liberty has helped more than 500,000 households and SMEs in Australia and New Zealand with more than $36 billion in funding and recently listed on the Australian Stock Exchange (ASX:LFG).  

James Boyle, Liberty Financial Group CEO says Liberty is energised by the companies’ aligned visions. “We see great opportunity for Avenue Bank in an area ripe for innovation. It’s also immediately adjacent the SME sector that the Liberty group has provided products and services to for much of the last 20 years.”

Avenue Bank and Liberty are focused on providing free-thinking solutions for customers that are not well served by conventional finance companies, helping them to lead better lives and businesses.

Mr Confos also notes that financiers with a banking licence are best placed to support SMEs. “As a bank we can provide a complete product and services offering to businesses. With our offering and our technology, we can work closely with our customers to help map their future cash flow. We aim to be a cash flow partner and you need to be a bank to do
that. We will be exploring more ways to leverage our status as a bank upon becoming an ADI, offering unique services in the market.”

Finally, Avenue Bank added a key hire to its executive team. Steve Kinsella joins the company as Chief Financial Officer, bringing extensive expertise to Avenue Bank. Prior to joining Avenue, Steve held the roles of Chief Financial Officer for Business and Private Banking, Head of Finance for Bankwest and Chief Financial Officer for the Institutional Division at CBA and has also had significant overseas banking experience having held senior Finance roles at ABN AMRO.