More Australian business owners are turning to alternative finance methods to find the best arrangement for their enterprises. Invoice trading stacks up to be one of the nation's top three markets for alternative lending this year, according to KPMG. As a growing market, invoice trading raised over AU$169 million for small to medium businesses in Australia, a considerable increase on the amount raised the previous year.
So, what is it about invoice financing that makes it so appealing to small business owners?
Lower documentation requirements
When you choose invoice finance, you don't risk any part of your business.
Most banks will require a business owner to show a strong financial history and reliable cashflow before they're willing to provide loans. They'll also often seek collateral in the form of your business' assets as added security.
The tighter prerequisites to receive financing from a bank make them a far less accessible option for many small to medium business owners. As only 53 per cent of small businesses were cashflow positive in August, according to Xero, that leaves almost half of SME owners unable to show banks that they have the reliable cashflow needed to get a loan.
Putting up business assets adds risk to any loan, as defaulting could result in the loss of major assets. When you choose invoice finance, you don't risk any part of your business.
Offering greater flexibility to your finances
As banks have far more strict regulations surrounding lending, you'll be limited in what you can use your loan for. With invoice factoring, once you've received payment, the money is yours to use as you see fit.
Furthermore, alternative financing facilities often offer more than one solution. Invoice factoring can be provided alongside other products, such as a secured loan agreement for business equipment. With different options available, your provider is better able to work with you to build personalised and streamlined financial solutions.
Embracing today's technology
At Earlypay , we also recognise the role technology should play in cashflow efficiency.
Almost two thirds of small business owners turn to technology to monitor and manage payments, reports Xero. The same number allow clients to pay online, and the vast majority who do claim that digitised payments have been effective in reducing late payments.
At Earlypay, we also recognise the role technology should play in cashflow efficiency. Apply for invoice finance with us online and our speedy processing will allow you to receive up to 80 per cent of invoices within 24 hours of applying. For more information, call us on 1300 760 205 today.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].