Leveraging Alternative Finance Solutions for SME Success

Leveraging Alternative Finance Solutions for SME Success

by | Jun 15, 2024 | Alternative finance, Small Business Finance

Alternative finance solutions may be the missing link when building a successful business that is challenged, especially during an economic downturn. However, understanding how to navigate a tough market is essential for the long-term sustainability of your business. In this article, we’ll explore how a challenging economy impacts businesses and discuss financial solutions available, including working capital finance, alternative capital, unsecured business loans, asset finance, and business line of credit.
know how to navigate a tough market …

Alternative Finance Solutions
Utilize working capital finance to maintain daily operations and cash flow

Consider unsecured business loans for flexible, collateral-free funding

Leverage asset finance to acquire necessary equipment without large upfront costs

Navigating Tough Economies: Leveraging Alternative Finance Solutions for SME Success

The alternative finance sector continues to evolve with technological advancements and changing market dynamics. The integration of artificial intelligence and machine learning in credit assessment processes is streamlining risk evaluation, expediting loan approvals. Additionally, the rise of peer-to-peer lending platforms and crowdfunding initiatives is democratizing access to capital.

According to a report by Statista, the global alternative lending market is projected to reach $490.51 billion by 2025, with a compound annual growth rate (CAGR) of 21.1% from 2020 to 2025. This robust growth highlights the increasing acceptance of alternative finance solutions among businesses worldwide.

Download Free Cash Flow Checklist
alternative finance for trade

What effects can a tough economy have on a businesses?

During an economic downturn, businesses often face reduced cash flow due to declining revenue, increased debt to cover rising costs, and limited access to additional capital. This restricted cash flow can hinder efficient operations, investment, and innovation, impacting a business’s ability to weather financial storms and achieve growth.

Tough economies can manifest in various forms and are often caused by multiple factors. Typically, an economic downturn results in reduced demand for products or services, stemming from recessionary periods, financial uncertainty, geopolitical shocks, or other disruptive events. These conditions can lead to lower consumer spending, reduced supplier stability, and overall market pessimism, creating significant challenges for businesses.

An economic downturn is a decline in the growth rate of Australia’s gross domestic product (GDP). GDP is the total market value of all goods and services produced within Australia. More information from Business Queensland website ‘ Surviving an economic downturn’ .

Explore trade finance to facilitate reliable international trade agreements

International Trade Finance
Use invoice finance to convert outstanding invoices into immediate cash flow

5 Alternative Financing Options to Explore

Working capital finance is essential for maintaining daily operations and meeting short-term obligations. Traditional banks often have stringent requirements and lengthy approval processes, which can be restrictive. In contrast, working capital finance offers faster and more flexible solutions, enabling businesses to access funds quickly, maintain cash flow, and seize growth opportunities without traditional lending constraints.

Unsecured business loans are a standout feature of alternative finance. Unlike conventional loans requiring collateral, unsecured loans are based on the creditworthiness and potential of the business. This is particularly beneficial for startups and SMEs that may lack substantial assets. According to the SME Finance Forum, 40% of SMEs globally face significant financing gaps. Unsecured business loans provide essential capital for expansion, technology investment, and enhanced competitiveness.

Asset finance allows businesses to acquire necessary assets without incurring large upfront costs, preserving cash flow. This is particularly beneficial during tough economic times, as it enables ongoing operations and growth without depleting financial reserves. By leveraging existing assets such as equipment or vehicles, businesses can access funds needed for expansion, upgrades, and operational improvements, maintaining agility and market share.

Invoice finance provides businesses with immediate access to cash by converting outstanding invoices into liquid assets. This method improves liquidity and reduces the risk of cash flow disruptions, allowing businesses to continue trading successfully without waiting for prolonged payment terms from customers. Improved access to reliable working capital helps businesses navigate uncertain times and focus on strategic initiatives and long-term planning.

Trade finance is vital for businesses involved in importing and exporting. It facilitates new trade agreements with trust and reliability through third-party financiers, ensuring payment and service provision. During difficult financial times, maintaining and creating strong trade relations with suppliers and customers is crucial. Trade finance enables businesses to persevere and recover through economic downturns.

The Competitive Edge of Alternative Finance

Alternative finance solutions offer a competitive edge through speed, flexibility, and accessibility. Unlike traditional lenders, alternative finance providers use advanced technology and data analytics for quicker approval processes. This agility is crucial for SMEs in fast-paced markets, where timely access to capital can mean the difference between seizing opportunities or missing out. Alternative finance also caters to a broader range of businesses, including those with limited credit histories or unconventional business models, fostering innovation and entrepreneurship.

In a challenging economy, alternative finance solutions such as working capital finance, unsecured business loans, asset finance, and cash flow solutions provide SMEs with the tools needed to thrive. These flexible and accessible funding options align with the unique needs of each business, helping them maintain operations, seize growth opportunities, and achieve long-term sustainability. Embracing these solutions is a strategic choice, paving the way to sustainable success in a competitive landscape.

Visit Accrutus Capital website to learn more about alternative finance options to help you business or call 07 3184 9183.

Finding your business bank too restrictive?

Explore Alternative Finance Solutions
  • bespoke structured facilities
  • ideal for manufacturing, logistics, property projects, supply chain, food and retail.
  • leveraged options from $100K to $5 million.
  • digital payment platforms for local and global trade.
GET STARTED

DISCLAIMER

The disclaimer covers content, comments, responsibility, links, government and local laws, jurisdiction and communication methods. None of the contents on this website or blog should be construed as any kind of advice or recommendation. Nothing in it should be taken to constitute a statement that is intended to influence a person or persons in making a decision regarding any investment or financial product. This website or blog does not purport to be complete, accurate or contain all information which its users may require to make an informed assessment of whether to invest in any Offer listed through Accrutus Capital Pty Ltd.

Download Cash Flow Checklist

Seek Expert Advice to manage working capital – SME’s advised

Seek Expert Advice to manage working capital – SME’s advised

by | Sep 2, 2022 | Small Business Finance

SME’s advised to Seek Expert help to Manage Working Capital.

Only 25% of SME businesses use their existing advisors such as accountants and advisers to plan their future working capital strategies. And those businesses that do are reaping rewards through better understanding their cash flow forecasts, their existing customers whilst arranging smarter tax and alternative finance options.

Here we explain how your business could benefit from bringing a fresh pair of eyes to the table. Seek Expert Advice to manage working capital – SMEs advised.

undertake cash flow forecasts

focus on existing customers

make arrangements with ATO

SME Growth Index

Small Businesses should explore strategic advice to manage working capital according to a leading national survey of small businesses.

The *SME Growth Index is Australia’s longest-running in-depth research on small business growth prospects.

    • undertaking cash flow forecasts (the key strategy nominated by 28% of all SMEs – but around half of larger SMEs with $5-20m revenues)
    • focusing on existing customers (27.5%) or new customers (22%) to grow revenue
    • making arrangements with the ATO (17%)
    • using invoice finance to smooth out cash flow peaks and troughs (16%)
    • increasing their overdraft (12%)

How can Invoice Finance help your Cashflow

One in six businesses were looking to Invoice Finance to manage their cash flow using financial solutions such as invoice finance, trade finance and asset finance during the pandemic recovery.

John Sutton, CEO at Scotpac commented, “We would like to see more small businesses undertake cash flow forecasts because our research found that only a quarter of SMEs do so – this is fundamental to success, and this is something accountants and brokers can be reinforcing to their clients.”

He said the fact that so many businesses are looking to restructure and are looking for ways to manage their working capital provides a perfect opportunity for accountants and brokers to initiate discussions with their SME clients.

“Australia’s small business sector relies heavily on brokers and accountants, who understand the importance of cash flow and have a good understanding of strategies and solutions to enable business success.”

“It’s the perfect time for accountants and brokers to ask their small business clients what changes they are looking to make, whether they have a clear view of how much working capital this will require, and if there are shortfalls, help them find new ways to fund the business.”

*SME Growth Index survey of small business.

Download Free Cash Flow Checklist
International Trade Finance

*SME Growth Index: Twice a year since 2014 market analysts East & Partners conduct this research, Australia’s longest-running in-depth research on small business growth prospects.

*SME Growth Index. A representative national sample of 1253 $1-20m revenue businesses were surveyed and interviewed.

The Accrutus Cash Flow Solution

Here at Accrutus Capital, we have been offering trade and invoice finance to our clients for some time now.  It’s been incredibly rewarding to see how this alternative method has been so valuable for companies with cash flow constraints.

Working with us, you won’t get the same apathy that you might experience from a bank or another financial provider.  Because our interests are tied to yours, we want to do everything we can to help you grow your operations.  We genuinely care about our clients.

We focus on providing the most flexibility possible at an affordable price that doesn’t eat into your margins.  We also don’t require any security for this financing.  The trade invoices themselves serve as the collateral.  You simply won’t find an easier and more convenient way to solve your cash flow problems.

Accrutus Capital offers our clients a range of flexible finance solutions to help businesses access the capital they need to grow. Speak to us today to explore your funding options.

Call us today and speak with our working capital loan specialist. Together we will devise a plan to help boost your cash flow with up to $5 million approved facility ready when you are.

Looking for small business finance?

Working Capital Credit Lines to $5 million

  • Trade with flexibility, ease up capital
  • Track and manage your supply chain
  • Tailored finance structures from $100K to $5 million.
  • Leverage your assets for strategic
GET STARTED

DISCLAIMER

The disclaimer covers content, comments, responsibility, links, government and local laws, jurisdiction and communication methods. None of the contents on this website or blog should be construed as any kind of advice or recommendation. Nothing in it should be taken to constitute a statement that is intended to influence a person or persons in making a decision regarding any investment or financial product. This website or blog does not purport to be complete, accurate or contain all information which its users may require to make an informed assessment of whether to invest in any Offer listed through Accrutus Capital Pty Ltd.

Download Cash Flow Checklist
Boost Business Cash Flow Download

SMEs go it alone instead of calling on expert advisers

SMEs go it alone instead of calling on expert advisers

by | Aug 26, 2022 | Small Business Finance

The Real Cost to SME’s when going it alone – Despite the challenges small businesses faced in the past year, too many still go it alone rather than call on expert assistance when looking at structuring, planning, business succession & risk management.

We pinpoint the key areas where small businesses should be calling on experts for advice and why.

SME’s go it alone instead of calling on expert advisers.

New Measures to Reduce your Tax Bill

by | Aug 19, 2022 | Small Business Finance

New Measures to Reduce your Tax Bill.

Most people’s idea of tax planning is what Sam Ayoubi, director tax services at KPMG, calls symptom relief, problem solving or putting out fires. But as we move into a new financial year, it’s vital to ensure you are making the most of some new incentives now available.

One of these is temporary full expensing. Announced by the government in its October 2020 budget, this allows businesses with a turnover of less than $5 billion to immediately deduct the business portion of the cost of eligible new depreciating assets.

For more on how to reduce your tax bill click here. New measures to reduce your tax bill.

How to Create a Cash Flow Forecast

How to Create a Cash Flow Forecast

by | Jun 20, 2022 | Small Business Finance

Cash flow is one of the most critical factors in the success of any business. Forecasting your cash flow enables you to take steps to ensure you have enough liquidity to capitalise on opportunities and grow your business. Key Cash Flow Statistics:

  • 63% of Australian small businesses experienced cash flow problems over a 12-month period.
  • Australian small businesses miss out on opportunities worth billions a year due to insufficient cash flow.

A cash flow forecast helps you to predict times of cash shortage and surplus. This information is vital for making informed decisions around business finance, growth opportunities and tax considerations.

Forecasting Financial Outcomes

You can use a cash flow forecast to predict the impact of potential changes on your business. For example, if you hire a new staff member or purchase new equipment, you can see how the additional expense will impact your cash flow before finalising the decision. By plotting the best and worst-case scenarios, you can anticipate how your cash flow will be impacted if you see an increase in trade or an unexpected expense. These insights can help you to feel confident when taking steps to grow your business.

Creating a Cash Flow Forecast

The best way to create a cash flow forecast is to break the process down into three manageable steps. Before you begin, you need to decide on the period duration you will be forecasting. Many businesses choose to use a monthly cash flow forecast.

Step 1: Estimate Sales Cash Inflows

The starting point for your cash flow forecast is to prepare your anticipated sales income. This is a breakdown of how much income you expect to receive from selling your goods or services over a set period. Looking at previous years sales figures should help you to identify trends and provide a good indication of expected sales. You need to take into consideration any factors that are likely to impact sales income for the period you are forecasting. This can include any price reductions/increases at your business, and any external factors that are likely to impact your sales revenue. For example, if you operate in an industry that sees seasonal peaks in demand, you need to count any increases in trade or quiet periods. It’s also important to factor in any changes to your business that may impact your cash flow. For example, if you are launching a new product, you need to conduct market research to estimate how it will affect your sales revenue. Once you have estimated your realistic sales for the forecast period, you need to determine when you can expect payment to be received from your debtors. Sales revenue can only be accounted for as cash inflow when your business has collected it. Late payment of invoices by big business is a problem for over half of Australian small businesses: According to Xero SBI data, over half of Australian small businesses are regularly paid late. If your business struggles with extended payment schedules and late invoices, debtor finance can be an affordable way to access a line of credit by leveraging outstanding accounts.

Other Sources of Estimated Cash Inflows

Sales revenue isn’t the only source of earnings for many businesses. You should also include all other anticipated income for the forecast period. These can include:

  • Tax refunds
  • GST rebates
  • Government grants
  • Royalties
  • Franchise fees
  • Insurance claim payments

Step 2: Prepare a List of Estimated Cash Outflows

Estimated cash outflows should include all of your business’s day-to-day expenses. The payment dates of some expenses are more straightforward to determine than others, but you should try to be as accurate as possible with your predicted cash outflows. Estimated expenses can include:

  • Payments to subcontractors
  • Payments to suppliers
  • Staff wages
  • Direct debits
  • Property rent/mortgage
  • Business rates/taxes

Once you have estimated the day-to-day expenses of running your business, it’s important to consider the other costs that your business may encounter. Other Sources of Estimated Cash Outflows Aside from day-to-day operations, there are a number of ways that your business may spend money, including:

  • Purchasing new equipment/machinery
  • Finance repayments
  • Payments to owner
  • Hiring new staff
  • Insurance payments

Bring Data Together in a Cash Flow Forecast

You should have already decided on the period your cash flow forecast will cover. To create your cash flow forecast, you need to determine your opening cash balance – the amount of available cash at the start of the forecasting period. The next step is to add all of the cash inflows for the period from step 1, and then to deduct all of the cash outflows for the period from step 2. This will show you how much cash balance you will have left after all inflows and outflows of cash have been accounted for. The amount left at the end of this forecasting period is your closing cash balance. This amount will also form the opening cash balance for the next forecasting period. If you find that your cash balance is lower at the end of the forecasting period, it’s an indication that your business is cash flow negative and you may wish to improve your finances by cutting costs, increasing sales, or accessing business finance to cover a cash flow gap. If your cash balance is rising, it shows that the business is cash flow positive and in a good position to expand and explore new opportunities for growth.

Comparing Your Cash Flow Projection to Financial Results

A cash flow forecast helps you to analyse the financial performance of your business. It provides a benchmark for you to judge whether your business is meeting financial expectations. For a cash flow forecast to be effective, you need to make regular updates to your data to ensure that your projections are accurate. If your business doesn’t perform as well as you anticipated, you need to investigate why. It could be due to a new competitor, increased pricing from suppliers or a combination of factors. Proactively monitoring your cash flow enables you to identify risks and make informed decisions about your business. For example, many businesses have hidden assets that can be leveraged to improve cash flow.

Securing Business Cash Flow

Cash flow forecasts can also help you determine when you should look to raise business finance to promote sustainable growth. If you are looking to expand your business by making a new hire or purchasing new equipment, cash flow forecasting is invaluable for estimating the financial impact on your business. This is also true for periods where you experience a cash flow gap. If you are experiencing issues due to extended payment terms or your expansion plans are restricted by lack of liquidity, we offer a range of flexible finance solutions to help businesses access the capital they need to grow. Speak to us today to explore your funding options. Feel free to contact us for anything that relates to your business finances so we can help with your success.

Feel free to contact Accrutus Capital on +61 02 9006 1327 to discuss our capital raising services and working capital finance to fund your growth.

The Complete Guide to Buying a Business in Australia

The Complete Guide to Buying a Business in Australia

by | Jun 18, 2022 | Small Business Finance

Buying an existing business is a great option for people looking to break into an industry and for ambitious business owners looking to expand their operations.

Research from Industrial and Corporate Change reveals that business takeovers are more likely to survive and are generally more successful than new business ventures:

An established business comes with existing equipment, staff and customers – all of which take time and resources to build from scratch. But you’ll also take on any problems the business is facing. That’s why it’s essential to carry out your due diligence and be honest about your capabilities to make the business a success.

To help you navigate the process, we’ve created this guide to walk you through buying a business in Australia, and how you can access the funding you need.

What Is the Best Type of Business to Buy?

You should look for a business in an industry you are passionate about and is a good fit for your skills and experience. Be honest with your assessment. If you have zero background in an industry, consider getting some experience before buying a business.

However, if you have previously worked in hospitality, that doesn’t mean you can’t make a success of a wholesale business. But it does mean that you might need help with logistics, sales, and other areas of the company.

Understand the Industry

If you are unfamiliar with the industry, you’ll need to conduct in-depth research to ensure you have a thorough understanding of how the business works and makes a profit.

Take a look at successful businesses in the industry. What are they doing to thrive?

Depending on the industry, you may want to investigate international competitors. Are there any new products or services being developed overseas that could impact the domestic market and affect profitability?

The Motivations Behind a Sale

It’s vital that you know the motivations behind a business owner’s decision to sell. This will help you get the best deal possible, but it will also help you avoid buying a failing business.

If a business owner is selling to clear a debt, that’s usually a red flag. If the debt is secured against the business, why has the owner struggled to pay back the sum owed?

The best-case scenario is that the owner is looking to retire or sell because of issues that are unrelated to the business. The current generational shift in Australia is presenting a unique opportunity for potential business owners.

According to the Australian Small Business and Family Enterprise Ombudsman, 61% of employing small business owners are 45 to 59 years old.

As this generation of business owners reaches retirement, there’s an excellent opportunity to buy a well-established and profitable business.

How to Assess an Existing Business

Once you have reached an agreement in principle, you will be allowed access to the business’s files to determine whether you want to proceed with the purchase.

Financials

There are several key financial documents that you want to examine:

Balance Sheet

The current balance of the business’s finances.

Profit and Loss Statement

A detailed view of the business’s performance over time.

Cash Flow Statement

An overview of the cash income and expenditure of the business.

You should enlist professional experts to help you examine the business’s financial documents. A range of professional opinions can help you to identify any concerns or financial irregularities that could impact the business’s long-term success.

Legal

A legal review will reveal any issues related to partnerships, contracts and liabilities. This covers how the business is incorporated and any regulatory obligations, including any product warranties and guarantees provided to the business and its customers.

The legal review should also examine any litigation where the business or the owners were plaintiffs or defendants.

Customers

Customers will be your source of revenue once you take over the business. You should examine any major customers, identifying the percentage of revenue they contribute, their importance to the profitability of the business and what they have purchased.

You’ll also want to determine whether the customer is loyal to the business or if they have an existing relationship with the current owner.

Assets

Assets are the most significant contributor to the valuation of the business. They also have a considerable impact on the smooth transition of ownership and the amount of capital you will need to maintain operations.

For example, a food delivery service relies on vehicles to generate revenue, while a retail store depends on its IT system and customer database. You also need to establish whether all of the business assets will be included in the sale.

If the business owns equipment or machinery, Asset Financing can be leveraged to secure funding for the purchase, or as an additional source of finance once you have taken ownership.

Employees

Maintaining existing staff is the easiest way to ensure that operations run smoothly after the sale. On average, it takes Australian companies 39.2 days to fill a vacant position – the loss of productivity and on-boarding results in an average cost of $18,982 per new employee. Even for an entry-level position, the average cost is $9,772. If possible, you want to maintain existing staff to help you run the business.

Valuing the Business

Once you have assessed the business, you will need to conduct a valuation to determine whether the asking price is reasonable. You can enlist a professional valuer or financial advisor to conduct a formal valuation. The valuer will conduct an industry benchmark for the business, assess future profits and evaluate both tangible and intangible assets.

There are three standard valuation models:

Market-Based

This valuation is based on the sale price of similar businesses and the average industry valuation for a business of the same size and turnover.

Asset-Based

This approach utilizes the net assets of the company and subtracts the value of the liabilities. The valuation is the figure left after the market value of the assets and liabilities has been calculated.

Income-Based

An income-based valuation looks at the business’s cash flow and the expected profit the business will generate over time. These future economic benefits are discounted to provide a present valuation.

Financing the Business Purchase

Before you can negotiate a price with the business owner, you should look into how you will fund the purchase. There are several options, with the most suitable finance depending on your circumstances.

Asset Finance & Invoice Finance

The assets of the business you want to purchase are leveraged to provide access to funds.

Secured Loans

The loan is secured against your personal assets or the assets of the business.

Unsecured Loans

The loan is issued without any security on personal or business assets.

If you don’t own an existing business, loans and Invoice Financing can be a fast and affordable way to raise capital for a business purchase.

The lending provider will usually want to see a clear business plan and a good credit rating before agreeing to a business loan. Unsecured loans and Invoice Financing are generally easier to obtain.

If you already own a business, you can use your existing assets to fund the purchase of a new business. These assets can include outstanding invoices, debtors ledger, equipment and machinery.

An alternative lender can help you to leverage your existing assets and the assets of the business you want to purchase to access a line of credit to fund your business takeover.

Make an Offer

Before you enter into negotiations, make a list of the business assets and place them into two categories; non-negotiables and nice-to-haves. You should also set a limit of the highest price you are willing to pay.

Give yourself some room to increase your offer by starting negotiations at the lowest justifiable price. It’s always a good strategy to begin with a low offer and improve it if necessary.

If you agree on a price then arrange for a purchase contract to be drawn up, but be prepared to walk away from negotiations if the asking price is unreasonable.

Purchase Contract

Once you’ve agreed on a price, the next step is to draw up a purchase contract. This legally binding document ensures that you and the seller understand the terms of the sale.

A lawyer will be able to help you to draw up the purchase contract. The document should list all of the assets to be included in the sale, including both hard and soft assets of the business.

The document should also include contingencies for any unexpected issues caused by inaccurate or misleading information provided by the seller (e.g. if the business has more liabilities than the seller revealed at the point of sale). These contingencies will help to minimize the risk you take on when you purchase the business.

It’s also recommended that you enlist the help of an accountant to understand the tax implications before you sign off on the purchase.

If everything goes through as planned, the seller will agree to the terms of the sale and you’ll be the owner of an existing business!

We offer a range of flexible finance solutions to help businesses access the capital they need. Speak to Accrutus Capital +61 02 9006 1327 today to explore your funding options.
Fintech Changing World of Finance

Fintech Changing World of Finance

by | Sep 28, 2021 | Fintech online lending, Small Business Finance

FinTech changing world of finance from traditional banking is ripe for disruption and we’re finally starting to see that play out.  The FinTech industry has taken aim at the status quo. They are showing us that with some fresh thinking and new technology, the financial system can be significantly improved.

FinTech’s core idea is making financial services more accessible, approachable, and efficient.  We’ve seen this accelerated recently as the global pandemic has forced consumers to rethink how they engage with financial service providers. Instead of going into a branch, customers are moving to online channels, mobile apps, and other new forms of customer interaction.

For small businesses, these new forms of finance are exciting new avenues to support their growth and scale.  For those who can adapt to the new normal, they’ll find that this technology acts as a key leverage point for long-term growth.

“Australia can be a leader in digital assets. This means Australians can access new choices and lower prices. It means Australians can have more control of their financial destiny rather than being dependent on endless intermediation,” said committee chair, Senator Andrew Bragg, on occasion of the report’s unveiling in October 2021.

In this vein, let’s look at FinTech changing world of finance trends that should catch all small business owners attention.

FinTech solutions are no longer mere gimmicks.  They are becoming the most important force in the financial system as a whole.

How is FinTech Changing World of Finance

They will transform the way businesses operate as the new normal has embraced new customer and safety behaviors across all industries.

Augmented Reality

Mobile Technology

AI-infused CRM

Artificial Intelligence

5G Technology

Omnichannel Shopping

Fintech Changing Finance - Accrutus Capital
in 2021, AI (Artificial Intelligence) remains the top tech trends. To be incorporated into new and exciting processes and solutions like voice assistants and chatbots.

FinTech changing world of finance
Fintech changing world of finance by helping small businesses save time and money, through automating manual task.

In 2021-22 it is predicted that most of the company’s budget will be spent on automation of services, delivery and marketing.

FinTech alternative lenders

7 FinTech Trends that are Changing the World

1.  The Rise of Alternative Lending

In years past, small businesses were forced to beg and plead with banks to access the financing that they needed to grow.  Getting a bank loan remains a very difficult proposition for a company that cannot meet the stringent requirements set by the banks.

FinTech changing world of finance lenders have sprung up in their droves to help here, offering more flexible, efficient, and timely financing options for small businesses of all kinds.  In today’s world, you aren’t limited to just a few banks.  You actually have a wide variety of different options that you can select from – depending on your circumstances and your needs.

These could include working capital finance, trade finance, invoice finance, SME bonds, and so much more.  Each of these new product verticals offers a fresh take on fundraising in a way that works for you.

2.  Mobile Payment Options

Another area of FinTech that has boomed in popularity is the world of mobile payments.  Culturally, consumers are becoming much more comfortable with using their phone or e-wallet to make payments.  And small businesses that can enable these payment methods will benefit from this change in consumer behaviour.

The payments of the future will be vast and diverse, allowing each consumer to choose what works for them.  This only bodes well for small businesses that want to reduce as much friction as possible for their customers.

The more payment options you can offer, the more customers you’ll be able to serve.

3.  Advanced Analytics

Thanks to advancements in data science and machine learning, companies of all sizes are getting a better grasp on their data and what it can do for them.  The ability to derive key insights from customer data and link them to purchasing behaviour creates a treasure trove of information.  All of which can improve overall decision-making and transform your business for the better.

This will continue to improve over time and small businesses who get into this early will have a major advantage over those who don’t.

4.  Short-Term Business Finance

By removing a lot of the friction in the financial system, FinTech changing world of finance providers are able to offer short-term finance options that just aren’t possible with traditional providers.  Sometimes all a small business needs is a small bridging facility or working capital finance to get them through a temporary cash crunch.

FinTech allows them that opportunity without locking them into onerous contracts or long-term financing that they don’t need.  This flexibility is worth its weight in gold.

5.  Alternative Credit Models

FinTech providers have worked hard to develop products that can get around a lot of the red tape that exists in lending.  We’ve seen new credit models emerge that look at metrics and performance indicators that are specifically suited for small businesses.  These lenders understand the struggles of running a small business and have crafted solutions specifically designed for those companies.

This is a big step forward in getting small businesses the support they need to survive the early years and grow into larger companies that can make a difference in their respective industries.

6.  Crowdfunding

FinTech changing world of finance through the rise of crowdfunding is another key development and the new way to raise capital.  Whether it’s for a specific product or for an entire company’s equity, crowdfunding platforms offer an unique mechanism for fundraising.  It can be used to assess early demand and bring a large group of people along for the journey.  Instead of relying upon one key provider to fund the whole thing, the risk is widely diversified.  It allows for much more natural interaction between investors and their investees.

Small businesses can use this to their advantage to raise the funding they need while also building a community of stakeholders that care about what they’re doing.  Not to mention the vested interest they have in their success.

7.  Automation

The last trend we’ll look at here is automation.  FinTech changing world of finance enables a wide range of opportunities for small businesses to automate a number of their routines, and procedural financial tasks.  These tasks would previously have taken up a lot of time and resources.  By handing these off to intelligent systems, these businesses can deploy that energy to other higher-value tasks.

These FinTech systems can run 24/7 in the background, without any human intervention, and it opens up the doors for customers whenever they want to engage with your offering.  It also liberates your staff from tedious work and allows them to spend more time on the things that really matter.

Download Free Cash Flow Checklist

How These Trends Can Benefit Your Small Business

FinTech changing world of finance is important to look at some of the overarching patterns that can prove very valuable for any small business.

  • Speed. Instead of waiting weeks for a bank to come back to you, you can access funding quickly and efficiently through FinTech solutions.  Every minute you save here is crucial for keeping your business ticking along and it allows you to be much more agile as an organization.  Time is money, as they say.
  • Lower Costs. Because FinTech providers aren’t saddled with the infrastructure and legacy systems of banks, they can greatly reduce the cost of funding.  As a result, you can maintain strong margins and operating leverage while still paying back your loans.  This alone can be a game-changer for your company.
  • Less Paperwork. This might sound trivial but every moment spent on administrative tasks is time that isn’t being spent on growing your business.  FinTech providers who can eliminate a lot of the paperwork allow you to efficiently access finance without any roadblocks or bottlenecks.
  • More Flexibility. FinTech offers financial services that suit your specific needs so that you’re only using what you need when you need it.  You can craft your financial future as a result and tie your lending behaviour directly to the performance of your company.  Flexibility gives you options and that’s invaluable in the early years when you’re still looking for traction and scale.

All of these pillars represent significant improvements on the current financing options available to small businesses.  By leveraging each of these benefits, you can get on the front foot when it comes to your financial situation, making it that much easier to grow and prosper. Australian FinTech’s are now internationally competitive, according to 80 per cent of respondents, up from 64 per cent in 2019.

We will embrace FinTech changing world of finance, for 2021 and beyond, because there is not turning back.

Our Role at Accrutus Capital

Here at Accrutus Capital, we’re passionate about helping small businesses access these opportunities and walking with them as they transform their organizations.  These trends are not just a 2021 fad, they are here to stay.  And we are doing all we can to create the sorts of products and services that can be the catalyst for that.

If you’re looking for alternative small business finance, working capital finance, unsecured business loans, or a range of other solutions we’re here to help.  Get in contact today and let’s work together to bring your company into this exciting new world of FinTech.

Accrutus Capital is committed to increasing the awareness of fintech changing of world finance to facilitate multiple debt and equity options. These fast non-bank solutions boost cash flow when you need it most, saving you time and money.
contact Accrutus Capital

Call us today and speak to our alternative finance specialist. Together we will devise a plan to help boost your business growth with fast working capital finance.

Looking for Alternative Funding Solutions?

Get Fast Capital from $100K to $20 million

  • Banks won’t lend you money
  • Don’t have 3 years financials
  • Cannot provide collateral
  • No Pre-sales. Need to settle land?
  • Cash Flow is seasonal
  • Shipping delays and/ or supplier issues
GET STARTED

DISCLAIMER

The disclaimer covers content, comments, responsibility, links, government and local laws, jurisdiction and communication methods. None of the contents on this website or blog should be construed as any kind of advice or recommendation. Nothing in it should be taken to constitute a statement that is intended to influence a person or persons in making a decision regarding any investment or financial product. This website or blog does not purport to be complete, accurate or contain all information which its users may require to make an informed assessment of whether to invest in any Offer listed through Accrutus Capital Pty Ltd.

Download Cash Flow Checklist

10 Reasons the Bank won’t lend you money

10 Reasons the Bank won’t lend you money

by | Aug 15, 2021 | Small Business Finance

UPDATE AUGUST 2021. It’s never been more clear that money is the lifeblood of any SME.  The COVID-19 pandemic has demonstrated, once again, that cash is king.  You can have all the growth in the world but if you don’t have a strong cashflow cycle, you’re in trouble.  

Do you know the 10 reasons that are standing in your way for bank finance approval?

Can your cash flow handle the next six months of lockdowns?

Will your bank approve an unsecured overdraft?

Has your bank adjusted to the new normal?

(more…)

How Trade Finance can Rescue your Cash Flow

How Trade Finance can Rescue your Cash Flow

by | Jul 1, 2021 | Cash Flow Finance, Small Business Finance

Trade Finance to the rescue, as we have heard again and again that ‘Cash is King’.  But that analogy only really sinks in when you find yourself in that all-too-familiar cash crunch.  It can put your whole business at risk.

Unfortunately, this is a common cash flow problem faced by a lot of businesses.  They wait for their debtors to pay them, so that they can make good with their suppliers. In these situations you really are stuck between a rock and a hard place.

Not only are there obvious financial implications, but it can have a significant effect on your reputation in the market. Luckily, there are a number of alternative funding sources that you can take advantage of in these situations.  And in this article we’re going to focus on two in particular – trade finance and invoice finance.

This can affect future deals and partnerships that might come down the line.

Trade finance
Improve cash flow while preserving working capital

100% funding including deposit requirements

Utilise early payment discounts from suppliers

What is Trade Finance?

  • Trade finance is an alternative source of funding designed specifically for businesses trying to manage complex supply chain considerations.
  • Typically, you’ll get a revolving loan of sorts that offers much more generous payment options than your suppliers.  And you’ll also get built-in foreign exchange management to pay suppliers wherever they happen to be in the world.
  • This sort of financing means that your suppliers are paid immediately.  While you only have to manage one debt back to the financier themselves.
  • It helps directly with cash flow itself.  But it also simplifies operations so that you’re not chasing your tail all along a complex supply chain.
Download Free Cash Flow Checklist
Supplier finance

What is Invoice Finance?

  • The financier will give you the money upfront at a slight discount.  That provider will then carry that timing difference and credit risk.  And when the time comes, they collect the invoice amount from the debtor when they pay.
  • This is a rather unique form of financing that can be extremely powerful when utilized in the right settings.
  • It’s been transformational when it comes to working capital solutions.  Here at Accrutus, we’ve seen so many clients over the years benefit from its flexibility and reliability.
When you enter into an invoice financing agreement, you are essentially selling off your customer invoices.

International Trade Finance
Accelerate business growth and strengthen relationships with local and international suppliers – without the cash flow challenges.

5 Powerful Trade Finance Methods

  • Instant pay-out.  The speed at which you can access your funds is probably the biggest advantage.  As long as you have an approved account and an acceptable invoice, you can have that money paid out to you in real-time.  This means that you can settle accounts with suppliers on time and keep your business going.  Thus, leveraging the time you’ve saved in the process.
  • Supplier bargaining.  Every supplier relationship relies on solid negotiation.  When you’re struggling to meet the deadlines, you find yourself in a very difficult position.  If you’re savvy, however, you can use debtor finance like this to get better deals on your purchases.  In addition, you can take advantage of early payment discounts, and much more.  All of this can greatly improve your operating leverage.
  • Shift the credit risk.  Imagine not having to convince a bank to supply working capital on the basis of your company credit record.  Instead, you can use the creditworthiness of your customers to back your application.  This is a big deal for companies that struggle to get traditional bank finance.  It gives them an outlet to fund their working capital.
  • Ad-hoc usage.  The very nature of invoice finance is that you can utilize it only when you need it.  This flexibility is worth its weight in gold because you aren’t tying yourself into any long-term contracts.  You can leverage it in an ad-hoc fashion.  All that matters is that you’ve got an invoice to use, and you’re off to the races!
  • Not shown on the balance sheet.  This form of financing doesn’t show overtly on the balance sheet.  This can be very useful when sharing financials with investors and other stakeholders.  It keeps things much cleaner and shows a more accurate view of the business.  It doesn’t let cash flow constraints hamstring the long-term outlook.

How best to use Trade Finance

  • As with all financing options, you need to determine if this is the right option for you.  Typically, working capital solutions should only be used to fund actual working capital gaps.
  • These are what you need to fill in order to continue smooth operation.  You shouldn’t think of this financing as a means to finance long-term investments or anything like that.
  • The more precise and focused your trade and invoice financing is, the more effective it’s going to be.  You want to use this cash flow finance as a tool to manage timing differences.
  • And this happens while you are looking at ways to solve the root cause of the crunch.  This is how you can leverage this alternative funding source to kickstart your company’s growth.
  • When you come to the table with that mindset, then these tools are phenomenally valuable.  And it’s why we’re so excited about them.

The Accrutus Cash Flow Solution

Here at Accrutus Capital, we have been offering trade and invoice finance to our clients for some time now.  It’s been incredibly rewarding to see how this alternative method has been so valuable for companies with cash flow constraints.

Working with us, you won’t get the same apathy that you might experience from a bank or another financial provider.  Because our interests are tied to yours, we want to do everything we can to help you grow your operations.  We genuinely care about our clients.

We focus on providing the most flexibility possible at an affordable price that doesn’t eat into your margins.  We also don’t require any security for this financing.  The trade invoices themselves serve as the collateral.  You simply won’t find an easier and more convenient way to solve your cash flow problems.

Accrutus Capital is committed to increasing awareness for SMEs providing this generic business cash flow checklist. We can advise on different trade finance options, saving you time and money.
contact Accrutus Capital

Call us today to speak with our trade finance specialist. Together we will devise a plan to help boost your cash flow with up to $5 million approved facility ready when you are.

Looking to fund your cash flow?

Trade Finance Loans $5 million

  • Set your own trading terms
  • Track and manage your supply chain
  • Tailored facilities from $100K to 5 million
  • Pay your international suppliers with market leading FX rates
GET STARTED

DISCLAIMER

The disclaimer covers content, comments, responsibility, links, government and local laws, jurisdiction and communication methods. None of the contents on this website or blog should be construed as any kind of advice or recommendation. Nothing in it should be taken to constitute a statement that is intended to influence a person or persons in making a decision regarding any investment or financial product. This website or blog does not purport to be complete, accurate or contain all information which its users may require to make an informed assessment of whether to invest in any Offer listed through Accrutus Capital Pty Ltd.

Download Cash Flow Checklist

Boost Business Cash Flow Checklist

Boost Business Cash Flow Checklist

by | Jun 6, 2021 | Cash Flow Finance, Small Business Finance

The Business Cash Flow Checklist is a useful resource to independently evaluate the financial health of your company. There are many aspects to having a successful and profitable company. However, the single most important skill is mastering business cash flow as your company grows, because the #1 reason for business failure is insufficient cash.

If you want predictable cash flow in your business you've got to learn what to measure in order to get there. Otherwise, how will you know you have met your goals and level out the highs and lows when it comes to cash flow.

Break even points are another measurement that allows us to know when we have our bills covered monthly, importantly can you pay yourself.

Predictable business cash flow can ease a lot of stress and allow us to focus on other important operational areas. 

Is your cash flow management style chaotic?

Do you constantly seek out short-term business finance?

Is your business providing you the lifestyle you want?

Cash is King

  • Learn the small business principles of cash flow management by working through your own business cash flow checklist.
  • Review your internal sources to reduce stock levels, reduce overheads and watch out for theft and fraud.
  • Review your customer payment cycle, terms and overdue accounts and offer discounts for cash payment.
  • Develop a solid system to manage your suppliers and track the relationship.
  • Negotiate favourable payment terms such as paying by instalments or use interest free credit card cycles.
#1 reason for business failure is insufficient cash
Boost Business Cash Flow Download
Most importantly make sure your business operates entirely for the purpose of providing you with a profit, not just a job.

Business Cash Flow Checklist Review

If you take a truthful critical review of your business, you will recognize gaps and potential negative traps on the realistic financial health of your company. Before you start, remind yourself WHY you started this company?

  • The journey to managing business cash flow is unlikely to be a smooth one. Along the way, there will be unforeseen expenses, costs blowouts and under performance of sales departments to meet projected budgets.
  • If you are a new business without 3 years trading history, traditional banks are unlikely to lend your money. The Business Cash Flow Checklist takes a independent first step approach, ensure you consult with a professional accountant to confirm the financial health of your company.
As the business grows, investment into technology upgrades will be required in order to stay competitive.

Business Cash Flow for Technology and Innovation

  • This can often be a major capital expenditure and if not planned appropriately in advance, can impact your business cash flow. This off-course is highly relevant to the type of business you operate.
  • How innovative is your industry sector in embracing new technology that could easily make your product or services redundant. Investment into a professional sales and accounting platform is essential to track and report on the cost and profitability of delivering your different products and services. Alternative sources of funding provide a solution to innovative companies seeking to raise capital.

Business cash flow success is closely aligned with the growth plans of the company, to ensure there is sufficient capital to implement its strategy.

Business Cash Flow for Strategic Growth 

  • For a new company the main focus is on building a solid revenue base while building up the profit margins.
  • For an established company the focus shifts to a more tactical or strategic plan to keep momentum, or to speed up growth through acquisition or mergers.
  • This is also a dangerous time for a company if it grows too quickly, where management and current systems may not be adequate. This could have a spiralling negative effect on customer satisfaction, quality control and ultimately revenues.

Temporary cash flow boosts from the ATO will support small and medium businesses and not-for-profit organisations during the economic downturn associated with COVID-19.

How to use the Business Cash Flow Checklist

  • Identify the critical cash flow areas of the business
  • Assess the management of your debtors and creditors
  • Quickly determine your company’s liquidity to better manage cash flow
  • Review your pricing and cost of goods or services to remain competitive
  • Understand your assets, liabilities, equity, and business cash flow before borrowing money
  • Use the Business Cash Flow Checklist as your building blocks to mastering money

Download 97 Money Mastery Questions

Boost Business Cash Flow Download

Business Cash Flow Checklist

    Accrutus Capital is committed to increasing awareness for SMEs providing this generic business cash flow checklist.

    We can advise on different working capital finance options, saving you time and money.

    contact Accrutus Capital

    Call us today and speak to your finance specialist at Accrutus Capital. We might just be able to help boost your business cash flow with up to $5 million, with no security required.

    Looking to fund your cash flow?

    Unsecured Business Loans $500K

    • Purchase more supplies
    • Start a new contract
    • Grow your team and business
    GET STARTED

    DISCLAIMER

    The disclaimer covers content, comments, responsibility, links, government and local laws, jurisdiction and communication methods. None of the contents on this website or blog should be construed as any kind of advice or recommendation. Nothing in it should be taken to constitute a statement that is intended to influence a person or persons in making a decision regarding any investment or financial product. This website or blog does not purport to be complete, accurate or contain all information which its users may require to make an informed assessment of whether to invest in any Offer listed through Accrutus Capital Pty Ltd.

    Get your 97 Money Mastery Download