Have you heard of Brighte? I hadn't, until ASIC released statistics on the revenue of Buy Now Pay Later services. ASIC put Brighte in a category firmly next to Afterpay and Zip Pay. So how is it I have never heard of this service? In this article we get to the bottom of the pros and cons of Brighte capital.
Overview:
What is Brighte?
Brighte is a finance company specifically offering finance services for home improvements, including solar. You can use Brighte to fund solar systems, battery storage and even off the grid systems. Although Brighte was primarily founded to fund solar projects, they have expanded their offerings to include finance for many different things. As well as solar you can fund other home improvements like garage doors, roofing, flooring, plumbing and electrical.
Who owns Brighte?
Brighte is an Australian owned and run company established by Katherine MConnell in 2015. Before starting Brighte, McConnell worked for 16 years on banking and investment. She spotted a gap in the market and Brighte was born. Since then it has been recognised as the 4th fastest growing company in the Asia Pacific, with a growth rate of 8881% over the last three years.
How does Brighte work?
Brighte doubles as a finance company and a comparison website. From their site you can get preapproval for up to $15k, as well as compare quotes on home improvements such as solar. In order to be preapproved you need to enter a few details about your income and expenses to calculate your borrowing limit. Repayments are calculated on a fortnightly basis over a 12 month term. However, you can choose to repay over 60 months (5 years).
How can I use Brighte?
Brighte has an app that you can use to get quotes, make an application and manage your payments. You can also use the app to make one-off payments or pay out your loan completely. Similar to Afterpay and other Buy Now Pay Later services, you can also apply for more finance directly from the app. The difference with Brighte is that the money is specifically for home improvements and things that would be considered an investment, like green energy. You can't use Brighte to pay for your morning coffee or a new bicycle.
Is Brighte only for homeowners?
Brighte offers payment plans for home owners or people who are in the process of purchasing a home. It is one of the eligibility criteria for their entire product range. Furthermore, the money borrowed has to be used for home improvements. Loan reasons can include things like solar power, landscaping, plumbing and electrical and other indoor and outdoor improvements. So in short, yes, Brighte is exclusively for homeowners and those currently purchasing.
Can I use Brighte to finance a pool?
Yes you can. Brighte offers finance for pools and spas, as well as decking and fencing. You can also get quotes from different vendors on their website or mobile app.
Is Brighte really zero interest?
Brighte's 0% interest payment plan is interest free, although with some associated fees. They also have a personal loan product, which is subject to interest of 8.99%pa and a Green loan with interest of 5.89%pa. We'll discuss the other fees associated with Brighte products in the next section.
Brighte fees
Although Brighte offers 0% interest payment plans, they do charge a weekly account keeping fee of $1.50. One thing that stood out to me about Brighte is that their repayments are calculated fortnightly, and yet they charge their account keeping fee weekly. Here are the fees associated with their various products
Brighte 0% Interest payment plan
Interest rate: 0%
Establishment fee: $0
Account keeping fee: $1.50/week
Late payment fee: $4.99
Brighte Green Loan
Interest rate: 5.89%pa
Establishment fee: $299
Account keeping fee: $1.50/week
Late payment fee: $4.99
Brighte Personal Loan
Interest rate: 8.99%pa
Establishment fee: $299
Account keeping fee: $1.50/week
Late payment fee: $4.99
Brighte 0% payment plan eligibility
So it's clear that the 0% Payment Plan is the winner, but how do you become eligible? There are several approval criteria. To qualify for a Brighte Loan you must:
be a homeowner
be 18 years or older
be employed, self employed or a self funded retiree
have a good credit history
be a permanent Australian resident or citizen
Most of those are pretty straightforward, but what does it mean to have a "good credit history" and how much do you have to be earning? Lenders generally have their own criteria, and unless you work intimately with them it's hard to know. According to this report from the ACCC, 92% of Brighte customers have a credit score of Average or above, which is 500+. The report also states that less than 1% of their customers are currently 2 or more payments in arrears.
How does Brighte make money?
Brighte makes a majority of their money from merchant fees. These are the fees that businesses will pay Brighte in order to offer their finance plans to customers. This information from ASIC shows how Brighte makees their revenue as compared to other Buy Now Pay Later services. As you can see, most of their money comes from merchant fees. However, since the release of this data Brighte has added two personal loan products that charge interest, so their other consumer fee revenue may be a little higher now.
The Bottom Line
Is Brighte a good choice for finance? I would say yes. The company clearly has a purpose beyond allowing a consumer to buy more things that they can currently afford. Brighte is a way to add improvements to your home with a payment method that is affordable. Is it for everyone? No. But if you are a homeowner, then Brighte is a good option for finance for your home improvements.
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