There are but a few reasons behind the rise in invoice (or debtor) financing in Australia. As the calamitous impact of 2020 still lingers, many SMEs have rebooted with stricter payment terms and are looking to reputable non-bank financing to fulfil their unpaid invoices. Perhaps the most salient reason behind the uptick in invoice financing is the need for SMEs to reduce the lag time between point of sale and payment as 90 days can feel like an eternity.
The 2019 report from the Australian Securities and Investment Commission cited 46% of Australian businesses failing due to poor financial management. Although this report has circled across different financial forums of late, its prescience is up for debate as it’s business 101 to understand cash is king. Better yet, SMEs are also climbing over the perceived barriers to financing in droves as reputable non-bank lenders such as Grow Finance are making it accessible. If you have been operational for 6 months, you can apply for up to 80% of your unpaid invoices and have it within 24 hours and reap the benefits of reducing your payment terms from 90 days to 1.
Replicating this across all unpaid accounts and upholding it has part of future payment policies with new clients only nourishes the ecosystem of your enterprise. When supply chains are paid on time, deliveries are timely and when wages are fulfilled, quality customer service perpetuates. When your whole business environment is stabilised by healthy cash flow, you can invest more time and energy in driving business growth and responding to immediate changes without preoccupation with poor financial management. SMEs are seeing the cause and effect of quality invoice financing and how seeking support from companies such as Grow Finance allows for higher flexibility.
The popularity of debtor finance is a response to the tightrope traditional bank lenders making applicants walk with no guarantee of approval. Between a detailed credit history and favourable credit score, SMEs are often turned away at the last hurdle in the application process to receive financing. Furthermore, it is the same traditional gatekeepers who are preoccupied with a myriad of different services that prevents a detailed and personal understanding of your business needs. It is for this reason that Grow Finance exists. Between their expertise and personalised approach, they will assess your invoice financing needs and tailor a solution and repayments to your current situation. Better yet, approvals are immediate as they understand time is always of the essence and that driving business growth is key.
As Australians continue to understand the axiom of cash is king on a more profound level, they are too seeing its relation to freedom. Lenient invoicing terms are quickly becoming a thing of the past and although they have served to consolidate healthy relationships between clients, there are now experts at your disposal such as Grow Finance who step in as the timely reconcilers of unpaid invoices to ensure you can capitalise on the opportunities of the day without distraction.