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A Sydney-based fintech has launched a new invoice finance platform aimed at helping suppliers better manage their cash flow.
OmniPay’s web-based and mobile application allows the supplier to request an early payment of an invoice, which is financed by the fintech company upon receiving approval from the business.
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After setting up an account, suppliers have to import invoices manually or upload them by using drag-and-drop functionality, after which the OmniPay platform automatically extracts all the relevant information presented in an invoice and summarises it in a pop-up window. Once the supplier clicks a button to request payment, the platform sends the invoice off to the business for digitally signed approval.
The fintech lender pays 85 per cent of the value of the invoice to the supplier within one business day of receiving business approval.
The business is then required to pay the supplier’s financed invoice to OmniPay within the payment terms agreed with the supplier.
The remaining 15 per cent of the invoice is then passed on to the supplier minus a fee.
OmniPay charges suppliers a fee of 3.5 per cent of the value of an invoice for the first 30 days the invoice is outstanding, then an additional 0.07 per cent per day until the customer makes the full payment.
It also offers incentives for businesses to pay invoices on time, offering cash rewards for those that do.
While businesses are not charged any fees by OmniPay, the fintech lender has said that it will assess the financial strength of the business prior to partnering with them.
CFO Michael Thorburn told The Adviser that the lender regards its business customers as “partners”.
Mr Thorburn also noted that OmniPay does not require businesses to put up physical assets as security or have minimum annual revenue, adding that suppliers can balance varying payment terms across contracts.
The supply chain finance platform is initially targeted towards the construction industry, as it has the highest insolvency rate in Australia.
According to OmniPay, this is due to “inadequate cash flow, with poor financial control, lack of record keeping and high levels of cash use exacerbating the problem”.
“While insolvencies in construction are nothing new, a single large shock such as a head contractor going under reverberates both up and down the supply chain, leaving a trail of stressed and broken businesses and relationships,” OmniPay stated in an announcement.
However, Mr Thorburn said that the platform is suited to established businesses in all industries with large, diversified supply chains.
[Related: Fintech lender provides over $300m in SME funding]
