With tougher economic conditions and tighter lending criteria, Australian SME’s are increasingly looking to alternate sources of funding.
New data from funding solutions company OptiPay shows an increase in small businesses seeking invoice financing, which is commonly used by SMEs overseas as alternate sources of funding.
“With banks tightening up on how much and how easily they’ll lend money to SME’s, smart business owners are looking outside the box for solutions to grow,” says OptiPay CEO Angus Sedgwick.
“Invoice financing gives them an advance on the money owed from their business’ outstanding invoices – a revolving line of credit which they can unlock from their accounts receivable ledger,” he says.
Internal OptiPay data shows their customers are growing their sales revenue on average between 50-60% every year.
“What we see with our clients is a snowball effect. Unlocking that cash flow allows them to grow at a faster rate because they’re no longer having to wait 30 plus days for their invoices to be paid which allows them to utilise the cash from their sales revenue immediately within their business to drive growth.”
“The problem some businesses run into with a bank loan is that they’re growing so rapidly over a 6 month period that suddenly the approved loan isn’t enough and it can be virtually impossible to get that loan increased,” says Mr Sedgwick.
The demand for invoice financing has more than doubled since early 2018 with 16.3% of SME’s taking out a new invoice finance facility in the past 12 months compared to 7.6% three years ago.
“When a business is going through a rapid growth phase it needs cash as they might be taking on new contracts, new employees, upscaling machinery and possibly needing new premises so they’re spending money before they make any – and invoice financing can bridge that gap.”
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Who is OptiPay?
OptiPay, one of Australia’s leading business finance providers, has been dedicated to helping small business owners solve cash flow challenges for over a decade and has provided $1.5 billion in business funding to more than 500 Australian businesses. OptiPay specialises in modern financing solutions such as invoice factoring, invoice finance, debtor finance, and lines of credit. OptiPay’s mission is to support business growth providing liquidity in as little as 24 hours, ensuring they have access to tomorrow’s cash flow today. This rapid access to funds helps businesses maintain smooth operations and seize growth opportunities without the stress of cash flow constraints. At OptiPay, we believe that healthy cash flow is the lifeblood of any successful business. Our commitment to helping businesses overcome financial hurdles and achieve their growth ambitions has solidified our reputation as a trusted partner in the business finance sector. Whether you are looking to stabilise your cash flow, expand your operations, or navigate financial challenges, OptiPay is here to support your journey with innovative and efficient financing solutions.
