Banking minnow Heartland Bank wants to grow its share of the $30 billion small business loan market.
The NZX-listed bank, which has no branches, has been developing its online loan application system called Open for Business for the past 15 months and says it believes speed and accessibility will be key.
Jeff Greenslade, chief executive of Heartland, said the unsecured loans of up to $100,000 were an area that the bigger banks were not so interested in.
But the market could be worth as much as $30b.
Greenslade said Heartland's application process has been reduced to three minutes allowing tradespeople and rural businesses to apply for money from the side of the road via their mobile phone.
"We are playing on speed and certainty," Greenslade said.
"It fits with someone quoting on the job, he added.
The loans are then typically drawn down within nine days giving the bank time to do all the necessary identification and credit checks needed for finalising the loans.
Greenslade said it had a small fraction of the market share but hoped to grow that over time.
"If we get 10 per cent it would be great over time."
The small business loan push is part of Heartland's strategy to grow its online business.
Currently around 5 per cent of its business originates online but Greenslade said he believed as much as 60 per cent of its business, which includes personal loans and deposits, could be originated online.
Heartland's focus on small business and personal loans has helped it to maintain a margin much higher than the big banks.
Greenslade said the bigger banks were being squeezed because they were all competing on the same product: residential mortgages.
"The only way to get more business is to drop the price."
The big banks have also been under pressure from lower deposit growth forcing them to borrow more money on the overseas market.
But Greenslade said none of those issues applied to Heartland Bank.
"Our strategy is to avoid that. We give customers what they want, when they want it; so people will pay more."
While that meant taking on a higher borrowing risk, Greenslade said the risk return equation was working well for the bank.
The bank recently signed a deal with online farm-animal trading platform StockX which will allow farmers to trade directly with other farmers nationally with access to Heartland Bank's digital loan application.
It is also working on relationships with franchisers to build financing through Heartland into the process of a new franchise.