FiFit: Business loan that lets you borrow with Bitcoin

If your business has cryptocurrency in its investment portfolio, here’s news that might interest you: Australian-based lender FiFit has launched a business loan that lets companies secure funding against their Bitcoin.

This move comes in response to Australia’s growing interest in crypto, and is a step away from the standard secured business loan where a tangible asset (like equipment or property) would typically be required as collateral. 

FiFit’s director, Jack Martin says that with crypto - and especially Bitcoin - ownership becoming commonplace, there is also more need for lending facilities that will accept this form of asset as security. 

“As the demand for the digital asset grows, so does the requirement for surrounding financial platforms such as FiFit. FiFit gives cryptocurrency holders the ability to liquidate their productive asset without selling it,” he says.

In fact, recent research from digital asset exchange Independent Reserve found that nearly one-in-five Australians now own some cryptocurrency, with the most popular choice being Bitcoin. 

So how does FiFit work and what are the costs involved? Let’s take a look. 

How does FiFit work? 

Like any other business lender, FiFit will only provide finance for business purposes, whether that’s purchasing stock or covering staff costs. You can borrow anywhere from $500 up to $50,000, depending on your needs and the amount of Bitcoin you own. 

What are the interest rates and fees? 

FiFit has kept things simple on this front. There are two main costs involved: a 7% interest rate and a 2% establishment fee. 

Will my Bitcoin be safe? 

To minimise the risk of being hacked, your Bitcoin will be stashed inside a cold wallet during your loan term. 

For context, cold wallets are digital wallets located on a platform offline, so they’re protected from unauthorised access, cyber attacks or other vulnerabilities associated with being connected to the internet. 

What happens if the value of my crypto changes? 

If you’ve been keeping an eye on the news, you may have noticed that the  cryptocurrency market can fluctuate quite drastically. In mid-May for instance, the Bitcoin price fell by more than 7% after Tesla’s chief executive Elon Musk tweeted that his company would suspend Bitcoin purchases due to environmental concerns. So how would this volatility affect your business loan with FiFit? 

Movements in Bitcoin prices would impact your loan-to-value ratio (LVR). This refers to the value of your asset in relation to your loan, so if you have $100,000 worth of Bitcoin as security and you borrow $50,000, then your LVR would be 50%. If your Bitcoin value then falls to $90,000 for the same loan amount, then your LVR would rise to about 55%.

On the one hand, any Bitcoin value increases would enable you to access more funding should you need it. 

But on the other hand, if your LVR exceeds the agreed cap due to a decline in Bitcoin value, then FiFit would notify your business in real-time that this has occurred. You would then have 24 hours to lower your LVR. There are two ways of doing this: either providing additional security or paying down the owed amount.

“If this remedy is not actioned or the account progresses to the specified LVR maximum (whichever is first) FiFit will use the Bitcoin to settle the account and return all excess Bitcoin back to the business,” Martin says. 

How do I sign up? 

To qualify, you must have an active ABN and Bitcoin assets to pledge as security. If you meet these conditions, here are your next steps: 

• Apply online. This should take just a few minutes. You’ll need to provide your business information and specify how much you want to borrow. 
• FiFit will perform Know Your Customer and Anti-Money Laundering checks. 
• Once these checks are complete, you’ll receive a secure address for the crypto transfer. Remember that only Bitcoins are accepted. 
• After you’ve transferred your collateral, you’ll be given immediate approval based on the live crypto price. 
• Expect funds to arrive in your bank account relatively quickly. This could happen within the hour, although the exact timing will vary from bank to bank.
• Make repayments via electronic fund transfers or cash deposits.

Wondering how FiFit compares to other business lenders in the market? Head on over to our business loans comparison hub to get started today!