A competitor and deep pocketed investors... BOQ has cashed them up with debt funding.
AFR Article
Brighte, a buy-now-pay-later platform for home energy backed by Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar, has secured a $15 million debt facility with Bank Of Queensland that takes its total facilities to $45 million.
Of the 11,000 payment plans worth $90 million approved by Brighte since it started lending in October 2016, 94 per cent have been for renewable home energy equipment such as solar panels and batteries.
The facility with BOQ's finance division adds to a facility with National Australia Bank, which has just been extended from $20 million to $30 million. It would allow Brighte to expand its interest-free lending into associated areas such as air conditioning and flooring, while retaining its emphasis on energy efficiency, according to founder Katherine McConnell.
"Our vendors installing the solar panels are electricians anyway, so this will allow them to offer instantly approved finance on a range of home improvements," said Ms McConnell, who managed energy and equipment financing teams for Macquarie Bank before founding Brighte.
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"We think it will convert more sales for them because homeowners no longer have to extend their mortgages or get personal loans to finance the improvements."
Brighte charges the 550 vendors it has accredited a fee on every payment plan initiated through its platform. Homeowners will from 16 October be charged a weekly fee of $1 (a $75 sign-up fee, and varying monthly and fortnightly fees will be scrapped) as well as a late fee on tardy payments of $4.99 a time.
Vendors are paid for their goods upfront, with Brighte taking over the loans which to date have averaged $10,000 per payment plans. Loans can be up to $30,000 on repayment terms between six months and five years, with no penalty for early repayment.
About 90 per cent of applications for new payment plans were accepted, Ms McConnell said, with the sign-up process taking two minutes and the credit checking process about 10 seconds.
Brighte applies the household expenditure benchmark (HEM) in the approval process, if it is higher than an applicant's self-assessed expenses.
Westpac's reliance on HEM to approve home loans recently led to it settling a case brought against it by the Australian Securities and Investments Commission for $35 million.
If HEM is ultimately dropped by the banks, Ms McConnell said Brighte would follow their best practice, but the start-up already had more rigorous lending criteria than required as it did not charge interest.
Understanding of risk
"We are unregulated ... but it's never going to be in our interest or anyone's to lend a homeowner money they cannot afford to repay," she said.
With the cost of solar panels being defrayed about 30 per cent by the federal Small Scale Technology Certificates program, and further renewable energy incentives available from most state governments except NSW, Ms McConnell said the repayment period on panels could now be three years or less given soaring power prices.
BOG Finance's agreement to offer a debt facility showed understanding of the risk and reward in household renewable energy had increased, she added.
"There has been a substantial increase in Australian households looking to make their homes more sustainable and energy efficient," said BOQ Finance chief executive Adam McAnalen.
"BOQ Finance is looking forward to partnering with Brighte to help make this a reality."
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