Alternate Sources of Funding for Growth

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.”

Click here to read the full article

Share This Story

Sydney Harbour

Australia’s Best-Kept Cash Flow Secret

 Video Transcript The use of invoice finance as an effective business funding solution is growing year on year around the globe. While increasing at

Read More

On the lookout to improve your business finances?

Stay ahead, sign up to the Optipay Finance Newsletter.

OptiPay Cash Flow Finder