Q. What finance solutions does Dynamoney offer?
We offer asset finance, business loans products – both a term loan and overdraft account with a credit card – and insurance premium finance. What we’re seeing is that by having all the products on our platform, we can provide more solutions for the same client base.
Q. Where are you seeing the greatest demand at the moment?
We’ve definitely seen huge growth in our overdraft product. That product is not as big as asset finance for us yet, but we have seen 20 per cent growth month-on-month for the past six months in volumes settled.
Q. How are SMEs using the overdraft and credit card products?
SMEs can use the product for their daily cash flow needs, such as paying for website access and other platforms they use, or for things like filling their car up with petrol – all those day-to-day cash flow items. They don’t need to think twice about it, they can just tap the card and go.
Often, SMEs are in a position where they’ve got receivables, but in the meantime, they’ve had to pay their suppliers, leaving a shortfall to pay bills. Providing for those cash shortfalls upfront smooths out the ups and downs of the accounts receivable process.
Q. How does the insurance premium product help SMEs?
SMEs will often have quite considerable insurance requirements paid as an upfront, lump-sum payment. Paying $30,000 to $50,000 in one month ties up a lot of cash.
Supplying a product where we can break $30,000 into 10 payments of $3,000, for example, is a strong way of resolving the cash flow demands of SMEs.
This allows them to use the cash savings for other working capital purposes.
Q. What has been Dynamoney’s approach to commercial lending?
We have pitched a lower price to market. It does mean that we have to be more selective regarding the type of client that we take in order to support better prices, though, because we don’t have enough margin in the underlying product to pay for the losses of some of the sub-prime clients.
But from our standpoint, it means that we’re providing a cheaper product in the market to deliver in a segment that we think non-banks are not currently (or haven’t been in the past) operating.
Q. What advice would you offer brokers working in the commercial space?
The competitive landscape means that speed is a strong service offering that everybody has to come to the party with.
All the non-banks have done a tremendous job in trying to resolve that. It’s the biggest hurdle to ensuring that they can deliver for their broker clients but also for the end client.
My suggestion has always been to borrow when you can, not when you have to. If there is a cash flow shortage, you need that money now. So, brokers in the commercial segment should encourage clients to get an overdraft type of product in place. It means they’re setting their business up for success – borrowing when they can, not when they have to.
