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Promoted by SME Cash
Helping your SME clients with SME Cash.
A limited number of funders for invoice finance has led to SMEs being starved of working capital products. This has meant that brokers have lacked the incentive to recommend invoice finance to their customers and, in some cases, have stopped introducing the solution completely.
Japanese powerhouse and major global bank Nomura has committed funding with Altitude Funds Management (AFM) to support this market void. AFM manages SME Cash, the soon-to-be household name in Australian SME finance.
This is great news for brokers, as SME Cash runs on a powerful web-based platform, eliminating much of the broker front-end effort.
What does this product help borrowers do?
Invoice (debtor) finance can help resolve the key issue currently facing SMEs in Australia, which is lack of access to working capital.
SMEs can free up cash by borrowing against what is often the biggest asset in their business – invoices. This most particularly solves the problem of the cash flow crisis of being underfunded for general business expenses and growth.
Invoice finance also allows the business to be funded without any reliance on a mortgage or other property security.
How can brokers introduce this product into the client conversation?
If your client is an SME, chances are that cash flow is at the top of its mind, but not how to arrange the finance. The average SME just knows that it “needs cash”. This may be for anything from payroll, business growth, supplier payments etc.
So, for a broker to introduce invoice finance as a solution, it’s best to try to see if cash flow is the issue. An amortising business loan is definitely not the best fit to fund growth relating to imports, inventory or waiting for debtors to pay (meanwhile they need to order more stock from suppliers).
SME Cash gives brokers the ability to generate indicative pricing letters from smecash.com.au. It only takes five minutes for this pricing letter to be sent to the customer. The indicative pricing letter is the ultimate tool for re-engaging with existing clients and acquiring new ones, immediately taking the customer out of the market.
As a true multiple product lender, SME Cash products will also be a potential way to introduce invoice finance to your client.
What is the product lead time to settlement?
Invoice finance facilities require some analysis by a lender, but our sophisticated technology platform removes any complexity for the broker. The platform allows us to assess all information and consequent analysis very quickly.
The client’s accounting package is uploaded into a website, which further reduces delays and speeds up settlement time, so a customer needs to keep its accounting package up to date.
Once the facility is set up, clients can connect to the online SME BusinessCentre and receive funding the same day. Receipts from debtors are available to draw the day they hit the bank.
What kind of clients is it suitable for?
Invoice finance suits all clients that sell on invoice to other businesses (B2B) and can be particularly valuable when a business is experiencing cash flow constraints due to growth.
- Ideal for all sizes of businesses, from a single debtor to a full supply chain solution. The perfect solution for importers, exporters and manufacturers.
- For clients with a turnover of less than $2 million, but with receivables, BLOC finance is used, working along the lines of an overdraft facility.
- For larger customer turnover, we offer facility sizes of up to $4 million, plus import and other asset loans making a total up to $7 million.
What are the key aspects of this product?
As the client’s business grows, so can the facility size. All facilities are revolving and do not require amortisation. Using digital technology, SME Cash is able to lower the costs of origination and increase the profitability of a broker’s business by reducing their workload and shortening the time to settlement of a deal, dramatically allowing for market-leading rates and unprecedented customer service.
Naturally, pricing will be influenced by such things as debtor concentration levels, the type of business, and time taken for debtors to pay.
A great product feature of SME Cash invoice finance is that customers are still able to collect their own invoices and keep their existing bank accounts. This lets clients maintain close customer relationships and doesn’t disclose that they are using an invoice finance facility.
“SME CASH GIVES BROKERS ACCESS TO BIG-TICKET DEALS AND TO UNLOCK HUGE OPPORTUNITIES TO GENERATE REVENUE”
What is the remuneration structure like on this product?
SME Cash gives brokers access to big-ticket deals and to unlock huge opportunities to generate revenue in an underserviced sector. This is done by giving brokers the tools to quickly submit deals and get fast answers.
SME Cash has an industry-leading remuneration model that gives brokers great upfront commission and, even more exciting, a share in the profits of the asset pool they have generated. Brokers are also able to appoint sub-originators that can also contribute to the pool. This allows brokers to create new revenue streams and real value in their businesses rather than rely on outdated trail models.
Do brokers need any training to offer this product or is this a pure referral model?
Knowing where to find and identify opportunities is the key skill. SME Cash does all the heavy lifting of processing, leaving the broker free to pursue further deals.
Brokers can use our online digital application on behalf of their customers or, if the broker prefers, submit a scenario via email.
Accredited brokers receive full training on all SME Cash products, how to make applications and identify opportunities.
